The shift from the tem "Unlimited PTO" to "Discretionary PTO" has happened because early proponents realized it wasn't really unlimited, and they didn't want workers to think that way. But the "unlimited" term is still used to sell it, and still often appears in informal recruiting conversations.
Yeah, the current reality of it isn't great at a lot of companies. I've been places where it was done well though. For instance, having a mandatory minimum number of days of vacation helps combat pressure to not take time off, and leaders who openly encourage people to take their time helps combat a culture of not taking time.
It started as a positive thing, intending to trust the employees and give flexibility. Unfortunately, like a lot of things, sleazy leaders turn flexibility into manipulation.
"Well it's not a deceptive trade practice because no rational person would take such a hyperbolic or outlandish claim literally - much like 'best ISP in the UNIVERSE!' or advertisements suggesting that beer will make you fit and attractive."
It's just so slimy.