Just to explain for non-native anglophones, I think what they meant was "gave out a rule", but in idiomatic English "ruled something out" means it has been eliminated as a possibility.
I don’t think this is an accurate definition or etymology. The phrase can mean “formally remove” or just “eliminate”. I think it always alludes to using a stick of wood to draw a line rather than a regulation or law.
To "rule out" is to use a ruler to cross a line through something in a written list of items, thereby eliminating it from consideration.