Seems pretty low harm to the employee (it’s paid vacation) and it prevents some pretty ugly kinds of poaching.
Also, I thought this was a British-ism, because over there employers can't fire at will and instead once the employee (or employer) has given notice then the employer must keep paying them until the end of the notice period.
Techincally, garden leaves are longer, mandatory termination period, not banned under the FTC rules.
More generally, in high turnover industries, we're taking out x% of the workforce and paying them to not work, not develop skills, etc.
At the other end of the spectrum were the stories of fast-food workers being held to non-competes, which is just bullshit. If you can learn the job in a few weeks and basically anyone can do it, a non-compete agreement is absurd.