In general, this is true and I totally agree that rules against selling what is down are irrelevant when you rebalance. You don't have to worry about drawing down equities when they are down as by definition you will be buying more of them when they are down.
But in practice I ran up against another issue - when equities tank so much as they did in 2008, how much do you let your fixed income draw down to rebalance?
I have an AA and do rebalancing, in fact you could almost call me a die-hard about it. But I also have limit rule where if I don't let my fixed income portion drop under 10 years of after-tax expenses.
That helped me buy lot of equities in 2008 and early 2009 instead of standing like a deer in the headlights unable to buy. I could have bought a little more (maybe a couple of % more) to match my prior AA, but I don't know if I would have been able actually do it without the psychological comfort of many years expenses in cash and bonds.
We could truly have faced a very long multi-year period of stocks recovering, instead of the fast recovering in 2009. In that scenario I would have had the fixed income to draw on. We really did not know what we were facing at the beginning of 2009.
I'm sticking to that rule, and I hope I never face another year when I hit that limit.
My AA (and rebalancing) approach with the limit rule has been crafted to meet my psychological needs when dealing with the anxiety rebalancing sometimes incurs. So far I have rebalanced when my rules said to do so, even though at times it has been very, very difficult to do.