I don't see any problem with this practice as long as the refund is processed promptly. I personally have not encountered this, but I don't travel as much as many others here do.
LAX
Then the property should disclose this during the booking process and also have such information on the written confirmation.
When a hotel takes an advance deposit, I frequently need to remind them to credit the deposit to my bill when I check out. I suspect that a nontrivial number of people end up paying twice.