It's not done in our school system (one of the largest in the U.S.) but my husband is English, and in Britain, it is the norm. My niece goes to school all year but has one long break of four weeks from late July to late August, and about three weeks at Christmas, and one- or two-week breaks at other times between "terms." So there is no long slog where she has no break in sight at all, and she does get one extended break in summer months.
The school offers great programs at the school during the break weeks (though not at Christmas or in the long summer break). This helps working parents keep the kids occupied while the parents are working on those breaks. Kids just continue to go to school during those breaks and get things like a week-long computer "camp" or a combination of gymnastics and swimming time, etc. Our niece loves the break-week classes. But kids also can take those weeks entirely off and vacation or whatever with their families.
My in-laws feel that the year-round schedule keeps the learning fresh and current. They also see how many Americans scramble to find a lot of expensive camps and sitters etc. for kids as coverage because mom and dad must work while the kids are out of school for many weeks on end.
My niece and her parents always seem to be going fun places, taking a lot of trips, etc., much more so than most American families I know, so the breaks seem to work very well for getting them vacations and relaxation. Sounds like a good idea to me....
Homeschooling has no influence over their particular system because year-round school has been used over there for a very long time.