This can make some sense to me if you want the hotel to want to offer a "Best Flexible Rate" and still do inventory management based on stay lengths. E.g., it can offer you a superior "Best Flexible Rate" on the basis of your reservation being for a 5-night stay, and which you do have the BFR-defining right to cancel entirely if you wish before 4:00pm local time the day of arrival, but which you cannot turn into a 2-night stay for which they would have quoted you a higher "Best Flexible Rate" had that been what you booked in the first place. Just because I have a 5-night reservation under the "Best Flexible Rate", for example, doesn't mean that I think I would be guaranteed to get exactly the same nightly rate for the first two nights if I were to change in advance the 5-night reservation to a 2-night reservation.

The suggested workaround of making a bunch of 1-night reservations and then linking just the ones for the nights that you actually want to stay, allows the hotel to price each of those nights at what it would be willing to price them at for 1-night stays. For the additional flexbility, you're giving up whatever additional discount the hotel might have been willing to give on longer reservations.

But this is then transparent on both sides (well, the yield management is still as clear as mud, but the consequences are transparent). Seems fair to me.

Example:

5-night stay: Hotel is willing to give you the 5 nights at $100/night.
2-night stay: Hotel is willing to give you those 2 nights at $125/night.

Charging a $75 early departure fee is probably enough to discourage people from booking stays longer than they really intend to stay in order to get the better rate.

FT'er who books five 1-night stays: Hotel lets you have those reservations at $125/night.

You've avoided the $75 early departure fee no matter how long you stay, but if you stay >3 nights, you've lost more in the higher nightly rate than you would have in payment of the early departure fee.

However, the multiple 1-night stays strategy has other benefits. It allows you to drop days from the beginning of the reservation without having to recalculate the other nights at the point in time of the decision. For example, if you wait until the day before to decide to drop the first night, it may be that by then, you would be quoted $200/night for the remaining 4 nights if you were to change the 5-night reservation's start date.