A former large corporate employer of mine switched to this, a did this a while ago, and it was clearly a thinly veiled way to replace actual PTO and recuperative time with the odd extra three-day weekend. The H1 staff weren't going to complain about it - they just waited until they had a critical mass before switching to this.

I'd be equally critical of a start up that offered unlimited vacations. The idea of there being a 'good time to take a break' runs directly contrary to most start up's raison d'etre, and strikes me as equally disingenuous.