Many plan documents I've seen have a provision such as: "Hour of Service" means ... each hour for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer" for reasons other than performance of duties (such as vacation, disability, layoff, leave of absence) during the applicable computation period. Notwithstanding the above, no more than 501 hours of Service are required to be credited on account of any single continuous period of performing no duties.

Do these hours get credited for all plan purposes, including benefit accrual and vesting, or are these hours only used to determine whether or not a break-in-service has occurred? What are you basing your answer on (guidance at a conference, regs, etc.)?

The language you quote is originally from DoL Reg. 2530.200b-2(a)(2). It is counted for all purposes (not just to avoid a break in service). (See 2530.200b-3(a) for official confirmation of that.)

That said, you can have a plan that counts only "working hours." But a year of service is then 870 hours, and a break in service is 435 hours. (See 2530.200b-3(d).