I think rare situations can exist where a company would reasonably conclude that paying the employee not to compete is worth a lot more to the company than their salary. However, they should pay for it, not the employee (or the market, for that matter).

I think open source, the internet, and Stable Diffusion have shown that the diffusion of knowledge is generally in the public interest. I really think judges made a serious mistake when they stopped treating non-compete clauses as unlawful prior restraints on trade. They are not remotely in the public interest.

>No business would do this; non-competes would be de facto banned

That is the point. It is a sincere suggestion, because it would force companies to only seek out a non-compete in the case where the employees knowledge is valuable enough to warrant subsidizing their extended vacation.

And this does happen in the finance industry. Some businesses do in fact do this.