(My apologies if I am remembering things incorrectly, but wasn't there a time when the play of a hole was described as a sort of tortoise vs. hare thing?)
It's been pretty rare among any of the golfers I have watched or played with for the 50-odd years I have been involved with the game.
Pros would lay up to a "good" yardage when they couldn't reach a green, but these days that only happens on short par fours. In 1991, I was at the U.S. Open at Hazeltine, and the 15th (?) was ~600 yards, so guys laid up there. I saw Fuzzy hit three iron off the tee, folllowed by another one, and then an eight iron.
Norman famously hit it in two in practice round, but he hit both shots with driver--teed up.
The idea of laying up on a par three is so rare that Bill Casper's trick of doing four straight days in the U.S. Open, and making par all four times, is still talked about today.
FWIW, I have talked about doing it on our 208-yard par three, but only one person has ever actually done it on purpose AFAIK. Lots of people lay up there, but it's because they have inflated ideas of how far they hit their fairway woods. (None of them can hit a driver 200 yards, so using a three wood is just a dumb idea.)
K