Under utilized yes, but slacking off no. An employee is beholden to the work assigned to them. Large pockets of availability occur for developers when either a developer is substantially more productive than their peers or when internal processes limit increased productivity. In either case the developer is doing all they can to do their job with plenty of availability remaining for personal work.

Are there any corporations that explicitly tolerate personal work during work time?

Are there any corporations that explicitly know everything that each and every employee gets up to during work time?

Yes, some do. They monitor both real and virtual desktops.

But you dodged the question. When doing creative work, having an openly accepting environment makes a lot of difference. Can we agree on this?