RULE #3: YOU MUST REFRAIN FROM REWRITING, EXCEPT TO EDITORIAL ORDER
Now, this makes it sound like Heinlein is talking about not editing your work at all, which I don’t see as the case. Editing your work falls under, in this case, the Second Rule: finish the work. A rough draft that you’ve typed “the end” on is nice, but it isn’t finished.
But at some point, you have to decide it’s done, and further fiddling isn’t serving any purpose beyond feeding your own anxiety. So the advice is less, “You shouldn’t edit your work” but, “If you keep picking at it, it’ll never heal.”
So you have to reach a point of acceptance with the work, where you stop seeking one more bit of beta-reading approval, where you think if you just re-do this one part it’ll be right, and then the full scope of your genius will be clear. But are you really making it better, or are you just rearranging the furniture?
And, again, this is a point where you have to do some triage of your own work. Are you constantly fiddling because it really is salvageable, or because you don’t want to admit that you’ve invested too much into it already to put it in the trunk?
That’s the dark side of this advice: some works, you have to stop messing with and decide to send it out into the world. Others, you have to stop messing with and put it away forever. Either way, once you reach that point, you have to stop poking until someone gives you a really good reason to.