I've worked at two places who had this policy and it was remarkable how many people just burned themselves out by NOT taking a single day of vacation. There was always pressure from management to NOT take vacation, then you add in pressure from your co-workers to continually work late, push to get projects done on time, all at the cost of your sanity and physical well being.
My thought has always been if you're going to join a company who has an "unlimited vacation" policy, it's probably a good indication there's an expectation you're going to work yourself into the ground, then burn out and will need an extended amount of time to get yourself right.
If a company champions this policy during an interview, it's a huge red flag for me.
At risk of sounding like a management consultant, it was very much a matter of corporate culture. People at upper levels took vacation regularly and actively encouraged their reports to do so. One-on-ones often included asking about recent and planned time off, and "none, none" produced real pressure to use the policy. The lack of set days did save money when people left, which probably helped it stick around, but I think the initial adoption of 'unlimited' instead of some generous allowance was basically just a matter of not wanting to formally track vacation time. (One other significant point, especially for tech: there wasn't an expectation of having grand plans, and people who weren't taking time off would even be reminded that they didn't need any "good reason" to do so. I've definitely heard of places where taking a month off to hike the Andes is fine, but taking two days to catch up on sleep and errands is frowned on.)
I still don't take "unlimited vacation" seriously when I see companies advertise it; I'd want an account of the real policy, minimally from Glassdoor reviews or preferably from an employee I knew. But I almost never see US companies advertise 20+ days of paid vacation as a starting allowance, so if the goal is to maximize time off I suspect searching for 'real' unlimited might still be the best bet.
I've definitely heard horror stories about UPTO meaning "no time off", especially in crunch-happy industries where requests are simply denied. But people criticizing UPTO seem to describe it as an all around bad deal compared to allotted PTO.
Meanwhile, I mostly see companies (even successful, generous-benefits ones) offering extremely restrictive PTO. "Two weeks PTO for all uses, and you gain one extra day every few years" isn't an appealing offer in the slightest. I've definitely watched friends with graduate degrees and many years at one company try to decide whether to work sick or give up pay.
That doesn't make UPTO a reliable offering, but I'm not convinced that it's worse on average than the levels of set PTO on offer in the US.
Thinking adverserially: what's to stop someone from taking a month off then turning on notice on return?
I wouldn't take unlimited vacation as a sign of anything other than "we expect you to be reasonable and we don't want to micro-manage everything." Although if my experience had been different, I might think different.
It's also yet another way to ensure people who know they can just walk into another job (or that they won't get fired/laid off/never promoted) take loads of vacation, while people who _really_ need to be sure they stay employed or who might be having a harder time at work are always afraid to ask for it.
Buddy of mine worked for a company with unlimited PTO until recently. He would take 2, 3 months off because, as he put it, "I had them over a barrel" (he is extremely good at what he does). His colleagues, for the most part, did not.
In truth, though, the sole reason companies use unlimited vacation policy is that, in the US at least, it means unused vacation time does not accrue as a liability on the balance sheet, and companies aren't required to pay out for it if you leave.
I also have unlimited PTO and I definitely prefer it. No more worrying about hours, rollover limits, accumulation rate, how far I can go negative, etc. No more wading through vacation schedules wondering if the office is open on New Years Eve.
Same thing with free lunches - yeah, of course it keeps people in the office and possibly causes them to subconsciously work longer. But also...I get a free freaking lunch and I don't have to worry about it.
Life is better here.