We use hack days (or we call it "spa days" - as in, giving the codebase/product a spa treatment) as a day to fix things up, tidy things that have been bugging you for a while but no one ever got around to doing it, etc.

Often it'll be a case of "hey this table is actually searchable now" or "that page is now split into two" or "I removed a tonne of deprecated code"

It's actually really enjoyable in my company, we all like it. My only issue is that I rely on structure, and given "free-reigns" I tend to pick too big of a thing that I can't get done in a day or two, and I end up doing too much = nothing at all.

I usually use it as a "level up" day (which we also have, so I get 2) which is just a day to go learn something new and level up your skills as a developer.

I think the issue isn't so much the "hack day" but rather your company is trying to get more golden eggs out of it, rather than looking after the goose.