Beyond the fact that it is a total scam, it also creates a lot of animosity among employees. Because there is no set limit, heck there are rarely guidelines, people often feel it's used unfairly in their teams and org.
If there aren't guidelines thats where the problem lies. Management should be all over this. One size fits all. "Unlimited" is a nonsense term but shouldn't be taken literally and abuse needs to be called out.
I completely agree. I've worked at three places with unlimited PTO and none of them do. I think the moment you set that expectation the illusion of being unlimited goes away.