Only a very unusual headteacher would use any genuine "discretion" to do what they thought fair in the individual circumstances.
Not always. I took this issue up with the HT of one of the 2 prospective schools I viewed for DS recently.
The school in question is a v. small village school, and is part of a partnership of about 10-12 similar schools in the surrounding area.
She told me that, regarding this issue, the entire partnership has agreed that "exceptional circumstances" could well include holidays, provided that they have an "educational element"- which could be simply writing a diary of the trip.
Reasons for this decision include the fact that there are lots of service families in the catchment area, and that lots of people work in tourism here, so are busiest in the summer months.
The other school I viewed takes the opposing stance, is very very rigid on unauthorised absences, and has stated that it will enforce fines.
Guess which school I have chosen for DS?
And not so much because I plan for us to be swanning off on a 2-week package in June every year (couldn't afford it), but because I believe that this is indicative of a wider willingness to put common sense and consideration for families above toeing the line just to tick boxes and get a good Ofsted report.