Yes, there are some key details missing here. Was the employee laid off? If he did , and the options didn't vest, then there is nothing to do here. They can't use the loan to exercise the options, because he has no vested options. If the employee wasn't laid off, then why does he have to pay off the loan?

Sometimes, you can early exercise options before they have vested. There can be some tax advantages to do this, but one pretty big disadvantage, is if you exercise options before they vest and you leave the company, then you don't get the options.

A 100K loan that is interest free is pretty generous. I'd happily take a 100K interest free loan.

The exercise window can be quite short. I'm in a similar situation with a 3 month exercise window about 3 years from now, with a valuation that's dropped significantly from when I purchased the warrants.

What the hell, I’ve only seen that for leaving/getting fired.

If you stay you get 10 years to exercise normally.

Most places have a 3 month window in my experience.

That seems incredibly employee unfriendly