I agree. If it is their time off I would schedule stuff that could be cancelled last minute if needed. It's their plans and if they change, then they do need you to work. For your scheduled time off, and you tell them months in advance, it is unfair if they were to ask you to work it last minute as they should have covered it at that time you told them about it and they agreed. So I would not cancel my own vacation (that 7 days you said you have).
FWIW, I would have asked for more than 7 days of my choosing if going with 8 weeks of vacation and having a significantly lower pay due to that much vacation time. I would have asked for at least 2 weeks, since like you have found out, you don't know when they are planning their vacations, for how long they will be for (like 3 days only), and if they will happen to back out of them as well.