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.
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.
But as for the meaning, that's what it's always meant when I've heard it said. So it definitely means that, at least colloquially.