The description of these one-time-use points does not specifically address the status of the points in the event of cancellation but it appears they could be reused for another reservation during the same Use Year.
From the member's website:
•One-time-use vacation points expire according to the use year of the reservation booked and are non-refundable, non-transferable and cannot be banked or borrowed.
•One-time-use vacation points cannot be applied retroactively to existing reservations.
I think they are treated like banked points where they will be returned to your account, but cannot be banked or transferred and will expire at the end of the Use Year of the cancelled reservation. In addition, they can't be used to free up points from an existing reservation.
