Rule Context is not applying to direct reports.
SAP SuccessFactors Employee Central
Please note that Rule Context only applies to the user that is suffering the change.
For example, if you set your rule context to not consider Termination UI, that will only apply to Manager's termination (please note that this may also apply to Position Change and Global Mobility).
However, the updates done to the manager's direct reports will not follow that logic and might trigger the rule.
This is expected behavior.
Content, Rule, Business Rule, BCUI, Manager, Change, Direct Reports, Subordinates, Employees, Change, Update, Rule Context Not Being Respected. , KBA , LOD-SF-EC-JOB-RUL , Job Info Business Rules , LOD-SF-EC-CMP-RUL , Business Rules , LOD-SF-EC-TIM-RUL , TAT Rules, Validation & Take rules , Product Enhancement