I still don't get how there's any way holding it instead of selling it reduces taxes.
If you sell on vest, you pay income tax and 0 capital gains. If you sell after vest, you pay the same amount of income tax, and possibly nonzero capital gains.
Well... if it's worth $X when it vests, you pay income tax on $X. If it's worth $Y when you sell, you pay capital gains on $(Y - X), presuming you held it longer than a year. If it was less than a year, you pay income tax on $(Y - X).
At least, that's my understanding. I'm not a tax accountant, though. This is not financial advice.
There is no clarification to be made. There is no way to reduce taxes on RSUs by holding onto them longer. When $100 of RSUs vest, you get taxed on $100 of income. You can either keep the stock or immediately sell it with no further tax event related to that initial $100 whichever of the two options you choose. If you keep the stock, it is equivalent to having bought $100 of stock at that instant. Psychology aside, the hold versus sell-on-vest decision should be predicated entirely on whether you would have bought that amount of stock with your own cash at its vest price.
But you don't have to hold $company stock to do that. You can sell on vest for 0 capital gains, then buy diversified index funds and hold those long term.
If you sell on vest, you pay income tax and 0 capital gains. If you sell after vest, you pay the same amount of income tax, and possibly nonzero capital gains.