Help on how to handle issue

I am a new host on Airbnb. We closed on a property 2 months ago and have hosted 10 guests without issue.

I am having my first major issue and I am not sure how to handle it. When we bought the property, the jetted tub had dirty water coming out. After cleaning everything and running a few cycles, it completely cleared up.

I thought I was good to go. I have a guest staying for 4 nights (tonight is their first). They turned on the tub and the water is dirty again. Also, they ran the tub and filled it up with dirty water. Since it was dirty, they wanted to just shower instead. Well apparently my hot water heater cannot handle the tub and shower back to back. So now they are complaining the hot water heater doesn't work.

The guest is in the right here. I clearly had no idea how to maintain a jacuzzi myself. I need advice on how to move forward.

My rates, cleaning fees, and pet fees and insanely low to encourage booking for a new property. I offered her the $35 cleaning fee and $50 pet fee back and she gladly accepted.

I am supposed to go fix it tomorrow, but I know there won't be a solution for the jacuzzi. What do I tell them and how do I handle it? I am thinking a full refund so their first night is free and helping them find another Airbnb or offering them another 25% off on top of what I already gave them. Am I being way too generous?