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Sounds like he had unlimited PTO and had hardly used any of it to me.

They did take leave -- evidenced by the language about not being able to extend the leave by using PTO in the email from their manager.

Exactly. He's basically arguing over a few dollars (PTO vs leave), and I'm guessing it's not because he needs the money.

Because PTO needs to be approved by the manager which they weren't ready to do.