The caveat is that your employer keeps you on a very short leash. If you are fired you must have a new job within 30 days, else must leave the country. Not everyone has the stomach for this, especially if you have a family.
This kind of visa is very bad for the employees and virtually every country I've looked has a similar policy. A work visa should not be tied to a certain employer and the period to find a new job before having to leave the country should be at least a few months, not 30 days. It's incredibly hostile but hey, they can't vote, so nobody is going to fight for them.
In my experience companies do not lay off people, it's a huge legal headache, usually people change jobs on their own. I agree about short leash though, it's really bad, although manageable on H1B. The people on L1 are who are trully screwed up.
Are you high? Layoffs - and individual firings - happen all the time. The dirty secret of corporate America is that performance reviews (and even supposedly innocent constructs such as JIRA and other project management software) are really a pretext to firing someone. A firing for poor performance isn’t a significant legal risk if the alleged transgressions are documented in detail.
I personally know a lot of lazy or borderline incompetent engineers, (some of them even went through PIP) who do thrive in corporate environment and it is much easy for corporate just to keep them on payroll. This is especially typical for software industry. This is anecdotal experience and may vary from company to company or even from team to team.