Why holidays get auto approved even when Booking Required is enabled?
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Holiday time off type is used to auto populate holidays in users timesheets. This happens when you have holiday time off type selected and auto populate is enabled in List Time Off Types page. In this case application assumes that holidays are predetermined holidays and hence does not require any one to approve the same.
You will need to disable auto populate feature in order stop auto approving of the holiday time off type by the application.