I suspect they've created this rule because they've been dinged in the past by extending offers to writers who are using the offer for leverage with other agencies, and don't want it to happen again. It's part of the business and probably most agents just live with it when it happens, but maybe this particular agency had a particularly nasty burn and is smarting from it.
In my day job, I once extended an offer to a candidate who turned me down for a job in the state where she lived (the job I offered would have required her to move across country). This, despite the fact that she had explicitly told us that she wanted to move away from her state. She either lied to us, or changed her mind -- either is possible. But it's not hard to imagine that she used our job offer for leverage either to speed up the other company's process, or get a better offer from them. It stings to know you're someone's second choice. It sucked, it wasted a ton of my and my team's time, and I wouldn't want to experience it again if there were any way to avoid it.
So, I get where this agency might be coming from, even if it isn't the industry norm. By the time you extend an offer to someone -- and this is true of agents as well -- you've already invested a lot in them, both in the time you've taken to consider them and the emotional investment of getting excited about working with someone new.