Rules in 16800 don't work?

[FinPeter]

it's exactly like undeath explained above.
Without the -S slow mode the passwords that are too short (from the dict) are rejected immediately, while the -S mode is slow because it mangles the words with rules already on the host (CPU). This is just a speed tradeoff, a design decision. A known limitation

Do I understand this correctly: you need to use -S only if dictionary contains words which are shorter than 8 characters before any rules are applied? 

Then it makes sense.

If dictionary has both short (<8) and long (8 or more chars) words, are rules applied correctly to longer words even without -S?