My university let us take 3-4 courses, up to 12 credits total, as Pass/Fail, but only for electives.

I ended up taking just one that way. The policy was really designed for the breadth year because in upper years, you had much less room for electives, but you could try a difficult or unfamiliar subject without worrying too much about your GPA. If you discovered you liked it enough to switch into that major, the course would then be converted to a regular graded course.

I think allowing 3-4 Pass/Fail courses in the first year strikes a good balance. It gives students room to challenge themselves and explore unfamiliar subjects, while still preserving grades as a useful signal of whether they're prepared for college-level work.