You just want to apply the most restrictive number to the item you are trying to rebalance
That's the key.
One thing to keep in mind (and an easy source of confusion) is that the 5% rule is just 5 points or 'counts' of movement - the 25% rule is a 25% change in balance.
5 points is going from 10 to 15, or from 80 to 85. But 10 to 15 is a 50% change, and 80 to 85 is a 6.25% change. So for the change from 10 to 15, would have already exceeded the 25% rule, the 80 to 85 change is just touching the 5 point rule.
So, the 5% (points) rule will be the most restrictive for funds with allocations larger than 20%, and the 25% (movement) rule kicks in for funds with allocations less than 20%. Because 25% movement on a fund allocated at 20% is 5% or 5 'counts'. So that is the point where the rules meet.
I think he is just trying to weight things to their size and use just two numbers, not an equation.
So, 5 points of change, or a 25% change, whichever comes first.
Clear as mud?