Clearly this is a con, but the pro is that organizations could purchase way fewer licenses than the number of employees that might need to use the software, because presumably not everyone needed to be signed in at the same time. This worked well for software someone might access once a week, for example.

I haven't seen this model offered in a while though. Has it fallen out of favor, and if so, why?

https://en.wikipedia.org/wiki/Floating_licensing