What you can do for this is have time off be an "excluded" child entry on that users schedule. The only thing that actually reduces capacity is that on the their schedule.
Capacity is determined by the schedule either: at that users level if they have a schedule or by the default schedule if the user schedule is empty. So to get this to work here is what you need.
An intake form/record producer on "Schedule Entry" that does the following either in record producer script or by work flow
a. check to see if the user has their own schedule, if not copy the default schedule(or Parent schedule if you want resource managers to be able to apply a schedule for them) with calendar entries and name it their display name with a type of "user"
b. Creates an approval workflow/record if you have a requirement for time off to be approved.
c. Create an "excluded" child entry on the users own personal schedule that is the time off (the users capacity is now reduced)
If you do this you really want to add "parent schedule" to the RESOURCE --> users list view so that managers can still say "hey this resource should be at %50 schedule or something, and you also need to give type values on the schedule record (which is just string field) so you can filter, because, eventually EVERY USER IN YOUR SYSTEM IS GOING TO HAVE THEIR OWN SCHEDULE RECORD WITH THIS APPROACH. So you are going to need to be able to filter them out/in etc.
You also probably would want a business rule that if the parent schedules changes it also change the users primary schedule entries but keeps the excluded child entries.
You can learn more about it here: Resource schedules
Someone like arun.vydianathan or ITSMgal who are SN employees and work on the PPS product could tell you if his approach is completely out of the intention of oob set up or not.
