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Yes so long as there is no prohibition against doing so in your employee handbook you may substitute vacation for illness.
Yes, this is normal, at least in the US. Floating holidays are not vacation days or PTO/sick leave. They arent earned or accrued. Companies usually add them in to allow flexibility based on peoples beliefs. Dont want to take off for MLK or Juneteenth, then use them elsewhere.
Are Employers Required to Provide Floating Holidays? No. California law does not require employers to provide paid holidays or paid floating holidays. Some employers choose to observe paid holidays, such as New Years Day, Christmas or Thanksgiving, and to give employees additional floating paid days off.
Self-certification If employees are off work for 7 days or less, they do not need to give their employer a fit note or other proof of sickness from a healthcare professional. When they return to work, their employer can ask them to confirm theyve been off sick. This is called self-certification.