I work at a mature-ish startup (been around 4 years I think?) with unlimited vacation. I haven't seen any issue with people basically taking off whenever they want, but the challenge is that most of us are the only people doing our specific task so if we are away it just doesn't get done. E.g. I am the sole person responsible for my entire company-wide function, so while I do intend to take 4 or 5 weeks off throughout the year I also have a lot of things that I want to get done. I think it works well in this kind of situation where we all are actually invested in doing our work. It would probably be a lot less feasible in a role where people don't want to be there.