The real rationale is to remove a metric shitton of accrued PTO from their books if paying out PTO on employee departure is something the company does.
We do something like this now, and the rationale is that it's a positive experience for the staff, gives everyone a bit of a break, and you only "lose" days that nobody was very focused in anyway.
I worked at a company where we had 10 days of vacation + the office shut down for the last week of the year. Nobody had to use vacation time during that 1-week shutdown. If anything, it increased PTO accrued obligations because nobody had to use their PTO for time off during that week.
My friends in agency life used to have their office shutdown from the time of the holiday party, until the new year. Which was about 2 to 2.5 weeks.