For the majority of the schools, and yes I will exclude the top 3 law schools, they will take the higher LSAT score. However, they will have access to all of your scores and cancellations. Also, as I understand a cancelation takes one of your three attempts away. If you are trying to get into a school in low 1st or 2nd or 3rd tire, it likely wont matter. I would advice on your second question, but the term "bad score" carries ambiguity with it, its kind of subjective. For me I would be happy with a 160 or 162. But for some people that might be a bad score. So it depends.
P.S. I had a friend who took the exam 3 times and got into Berkley. Just saying.
Not to worry, I did the same. Just make sure that you will work more hard this time. If not, then do not cancel. It's better to have a 150, than 2 weeks before the december and saying to yourself, of F*** I have not studied at all!
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P.S. I had a friend who took the exam 3 times and got into Berkley. Just saying.