Thanks.
Omitting the relative (
that) and its verb (
are) serves to reduce an adjective clause to an adjective phrase, yes. Below, "rules" is modified by the relative clause (RC) 'that are provided'. That RC functions as an adjective, and it's the length of that utterance that's in play here. Shorter is more efficient:
The rules that are provided - Adjective Clause
The rules provided - Adjective phrase
'that are' is redundant. Participles modify nouns, so why the need for a semantically redundant subject (that) and a dummy verb (are) is probably what the speaker picks up on.
Example
[1] We have to talk to the guy
who is sitting at that desk.
[2] We have to talk to the guy
sitting at that desk.
"the guy who is sitting at that desk" -
relative clause
Note, 'the guy' functions as the object of the preposition 'to', and the prepositional phrase 'to the guy' functions as the object of the verb 'talk'. The relative pronoun 'who' functions as the subject of the verb 'is'. Omit the subject and you have to omit the verb. They're pair.
Reducing RCs to phrases is nothing spectacular. The relative, in being tied semantically to the object, is redundant meaning-wise. Its sole function is structural: in English every clause must have a subject and a verb. Take out that subject and the verb goes with it, leaving a phrase.