Not gonna lie After getting 2/3 of the way through the posts and seeing all but one or two of them being totally useless to your question I didn't read the last 3rd. So sorry if this has been said/addressed already.
I've done a fair bit of team racing in my day, where rule 17 is in practice non-existent even if it's not deleted because my proper course in team racing can include slowing maneuvers, while in fleet racing a slowing maneuver isn't covered in the definition of proper course.
My understanding of the rule is that it exists to prevent the use of aggressive match-racing style moves during fleet races.
Two big scenarios that stick out for me - first scenario: upwind. In team or match racing, if I can hook you (sail in from clear astern, establish overlap, and start luffing), I can luff you to the moon (well almost). I can luff up to head to wind (further than that and I become a "while tacking" boat, and lose my rights), which means you will get luffed past head to wind, and have to tack. This is why so much is done to prevent being "hooked" in match and team racing.
With rule 17 in fleet racing, generally my proper course doesn't include luffing head to wind or sailing above close hauled at all (except that 1% shooting the mark scenario, that one's a gray area), so rule 17 limits my luffing rights upwind to close-hauled and prevents me from hooking someone and forcing them to tack.
Downwind is similar. A common move in team racing is to sit on someone's air who's ahead, reel them in enough to hook them, and then take them way out to the side of the course to allow a teammate through. Similar at mark roundings - I can set a mark trap just before the 3-length circle when rule 18 would kick in and hook a boat and sail them off the course. I could sail them to the bar and I'd be within my rights while team racing, but that wouldn't be productive - typically what happens is I'll sail them past the mark just enough to allow a teammate to round ahead of both of us. So I'm not going more than 2-3 lengths to the side of/past the mark, just enough to put myself in a position where I'm guaranteeing I round before them. So it's a way to convert a "we're neck and neck" setup to an "I'm definitely ahead" setup.
So, without rule 17, I could round the windward mark, sail up behind someone, hook them and shove them up and turn down, and keep passing people all the way down the run like this, get to the leeward mark and hook someone I'm in contention for the series with and sail them 2-3 lengths past the mark (outside the 3 length circle of course), then turn upwind having passed them.
Now, 99% of beer can racers are never going to even think about moves like this - but at major championships, it's quite common for boats to be "match racing" each other.
Rule 17 takes away the ability of boats to use (some) aggressive match racing tactics in fleet racing. For a good match or team racer, things like picking shifts and handling the conditions can frequently take a back seat to playing the tactical game correctly in terms of what determines who wins. Rule 17 exists to keep the emphasis on the strategy and sailing your own race rather than knife fighting. It requires you to pass someone by out-playing the shifts or out-trimming the sails instead of by some cheeky maneuver.
It's similar in a reverse sort of way to the "one swerve" rule in Formula 1: The defending car is only allowed to change lines once to defend a pass. Otherwise you could just sit there swerving back and forth all day and stop a clearly faster car from getting around you.