Desired Behavior: SLA pauses over the holidays.
Unexpected/Actual Behavior: SLA does not pause unless it meets the pause condition on the SLA.
Most Probable Cause
It is working as expected as it is OOB behavior. SLAs do not pause for any reason except when they meet the pause conditions.
What is noticed in OOB instance is the SLA does not go to a paused state but in fact, the business elapsed time will not increment. The only time the SLA pauses is when the pause conditions are met. To see this, set up a new exclusion in your development instance for a day next week sometime. After that is set up, get the SLA to attach per the Start conditions. Add the Business Elapsed Time column to the task sla. Notice it stays at 0 seconds. Check this throughout the day.