I am not quite sure how the vacation system works....

Question, if I use a few of my own personal holidays and mark them as vacation days with what I have been allotted with my membership, does the amount of my vacation days left to use get cut by the same amount of days?

I think thats how it works, so Mad Monkey et.al. can take a few of their vacation days at the beginning of the year and mark their holidays, like Christmas time, as vacations, and then even if they use the auto vacation option, they will never run below enough to cover the ones they already have set.... if I understand how it works correctly?