You can setup the feature at Settings >> Web Booking Setup section.

If the effective date period is not set (blank), then all reservations received after enabling this feature will be associated with a COVID-HOLD reservation.

Existing reservations will not be impacted unless it’s moved to a new date or room type.

If the effective date period is set, then only reservations ending in this period (e.g. last night staying is in this period), will be associated with a COVID-HOLD reservation.