I guess it just seemed so implausible to me. As in, what happens if 2 weeks or 4 months in you just decide that the job is sufficiently ill-suited? Is there typically a trial period of equal time that precedes such an agreement?

What would be the practical consequences to the employee if they break that notice period in UK, i.e. stop coming to work (or, especially now with Covid, simply stop doing the remote work) sooner than these 3 months have passed?

I suspect you could be sued by your employer. Mind you I've never heard of anyone being sued in that way - can't imagine it would be worth it for the employer unless they could demonstrate a significant financial loss.

I investigated this once (while I was sitting around doing not much during a 3 month notice period, funnily enough). It's as you say, the breach of a contract is something where the employer would have to sue you for damages, and if you're sitting around not doing much, it's going to be hard to argue that losing you has caused them harm, much less enough to make it worth suing over.

I didn't break the contract anyway out of some combination of feeling like it was breaking a promise and the worry that Cambridge is a small town.

while I agree that this is common in Europe, if the company ceases to exist, what good is the 3 months notice for the employee? If he/she has any options, I'd leave asap and not worry about amicable terms with a soon to be non-existent entity.

Fair point - in that case I suspect that would be highly dependent on whether there are any assets remaining in the company and how the local legal system treats employees as creditors.

Mind you - if the company is going down the tubes they are highly unlikely to enforce any job contracts.