From being in partially similar (although not exactly same) situation (kinda "on the bench" as described in other comments, or kinda "interproject nothing to do"), I'll try to list some disadvantages I noticed (they surprised me somewhat too):

- it's hard to invest all your self into a "new project prototype"/"quick indie game"/... because: you totally don't know how much time you have (1 day? half year?) till you're "hired back"/"given new work"; and also there's huge probability the corporation will totally ignore your result however awesome it is, and at the same time you can't legally take it away and reanimate on your own because it's company property (done on company time). So, there's a strong feeling you might pour lots of hard work into project doomed to stupid failure and done on totally unpredictable schedule.

- you start to have feelings of "I'm worthless -- nobody needs me" -- because that's actually the truth: nobody needs you (at this moment - but maybe longer? maybe that's an allusion?). Also, in consequence, you start to lose confidence and trust to others: you were so strongly needed just days before (in the intensive project while you were "fully hired"), but then they threw you away so quickly and lightly... so were they lying from the beginning and did never really need you? or maybe you only thought you are good but are poor and they were relieved to get rid of you? think, why did they choose to get rid of you, not this other guy? also, why they didn't tell you anything straight in your face? And then after all of this, when living in this official "limbo", you're 100% surrounded by a band of similar "pseudo-loosers-maybe-not-really-but-often-feeling-so", many of whom feel similarly, resulting in a self-reinforcing echo chamber... (not to say the article notes that the building itself is already depressing...)

- A side note, for a partially different situation: (warning: stream of consciousness coming; sorry, don't have this analyzed well yet): when you're in an unofficial "interproject nothing to do", there are also two additional problems: one is, that it's unofficial; officially the company and manager expect you To Do Something, but they don't have time to give you something concrete, or give you crap looking totally like "nobody really needs it, but you'll have something to do". The second one is, that your schedule is even more unpredictable, because however long it spans eventually (even more than half a year), every minute you know they might just come and give you some serious work (fresh bug, or some longer project) and dump whatever "prototype" you were doing immediately. Finally, now I realized your prioritization also gets partially botched, because whatever crappy work you were given as "important" before, something slightly more important may come and show that the previous thing was in fact just pseudo-important.
That said, you can try to fight to retain consciousness and self-confidence, but it is really not trivial, and there are ways in which this situation can be depressing. Not to say it's 100% so (for some time this can feel like vacation, opportunities for learning, etc, etc), but the advantages were already listed in other comments, so I wanted to just show the disadvantages here.

And just to make it clear, regarding suggestion of "people who don't deal well under self-direction", I totally can, have loads of free-time hobby projects and entertainments (i.e. out of work), managed to have some of them published and open sourced, also did some freelancing gigs. So, for me this argument seems totally irrelevant.

edit: also, what started to interest me now, after reading the article and putting down my thoughts, that I don't really know, and am very curious, how this situation could be improved? because I believe its existence is rather unavoidable; I suppose in every one programming job there are more or less explicit interproject periods. (Or aren't they?) edit2: I mean, improved by the management guys / boss / company owner.