No, that's actually not that unusual anymore. It's not just France either, this happens also in Germany.

Not every hôtel does this, but I would say in my experiences, it's more than half.

The amount of the deposit is only blocked, so the amount is reduced from your credit line. In this sense, it is no different from some self-serve petrol stations that block 120€ or 200 € before you pump the fuel.