Adobe does two of these every year, one in winter around the holidays and one in July. From my perspective as an individual contributor, there are a few advantages:

- With no feature/project work that week, there is zero pressure to check email or slack.

- Teams are forced to build systems that are automated, resilient and documented enough that most of the staff won't need to be contacted during the shutdown week.

- The business has to prove it can run with just the necessary amount of staff for operations and customer support. (These staff generally work with their managers to take an equal amount of time off.)

Personally I use that week in summer to disconnect from work and do something theraputic for myself- go for a 7+ day motorcycle ride, preferably through places where internet connections are poor.