I confess at first glance it sounds like it'd be really good, but am I the only one who'd be a touch nervous about it after reading this part?
"The assumption being that they are only going to do it when they feel 100% comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business - or, for that matter, their careers!"
I mean, if I had a good boss then yes, sounds like a fun plan. If you don't though... well honestly someone going on holiday is always kind of damaging to others and you're never 100% "up to date," so it's a really good way to ensure you will never get any holiday time. Seriously easy to take advantage of employees, and it depends on the company culture but I think in most cases I'd just rather take the "X weeks off" or whatever.
(Note: I guess I am similar in some ways because I take off "about five weeks" of holiday time a year, but don't usually check with my adviser unless it's more than a week. But then at least I have an expectation of around how much time to take off, even if it's nice to not have forms to fill out and such.)