This paper develops a 3GPP-inspired design for the in-band-full-duplex (IBFD) integrated access and backhaul (IAB) networks in the frequency range 2 (FR2) band, which can enhance the spectral efficiency (SE) and coverage while reducing the latency. However, the self-interference (SI), which is usually more than 100 dB higher than the signal-of-interest, becomes the major bottleneck in developing these IBFD networks. We design and analyze a subarray-based hybrid beamforming IBFD-IAB system with the RF beamformers obtained via RF codebooks given by a modified Linde-Buzo-Gray (LBG) algorithm. The SI is canceled in three stages, where the first stage of antenna isolation is assumed to be successfully deployed. The second stage consists of the optical domain (OD)-based RF cancellation, where cancelers are connected with the RF chain pairs. The third stage is comprised of the digital cancellation via successive interference cancellation followed by minimum mean-squared error baseband receiver. Multiuser interference in the access link is canceled by zero-forcing at the IAB-node transmitter. Simulations show that under 400 MHz bandwidth, our proposed OD-based RF cancellation can achieve around 25 dB of cancellation with 100 taps. Moreover, the higher the hardware impairment and channel estimation error, the worse digital cancellation ability we can obtain.