In the case of situations like those, do contracts with unlimited PTO have a clause with "you cannot fire X employee for being too much on vacation"? Speaking from a place of complete and utter ignorance.
The concept of at will employment baffles me as a European, especially since healthcare is also tied up into it. Good point, I forgot that was a thing at all.
Generally the manager's hands are tied to by monthly HR reports. Any employee taking an excessive amount of holidays will be flagged up and the manager will have to justify such decisions.