Their assumption is that if you have negative interest rates, people will withdraw money from banks as cash so that percentage will go up.

Switzerland has recently entered this previously uncharted territory. It's leading to weird problems like banks being unable to process the new rates as the programmers assumed the world would never be so insane, and pension funds planning to withdraw their funds from banks and being outright denied access to their own money. There are persistent rumours about some funds thinking about building their own bunkers and storage areas for gold and cash, as they have an obligation to protect their investors funds and the SNB is now effectively confiscating people's pensions.