If the organization is focused on time spend no work (either in office or remotely) how can work be done in 80% of the time?
Really don't understand how it works in day-to-day. It resembles the unlimited vacation days policy which was later found out to be unhelpful to employees.
Arguably it matters in how you KPIs are set. I think it's reasonable to expect a full time employee to work more than one day a week. If you can meet all your KPIs with everyone working one day a week, then maybe you're aiming too low. Of course, if you require everyone to work 60 hour weeks to hit KPIs, that's an even bigger problem.
Banish from your mind the idea that "hours spent at work" translates directly into productivity. My butt in my seat doesn't produce anything. My brain is what produces code, designs, problem-solving, ideas, etc, and it, like any other part of my body, needs periodic rest in order to function properly.