Too many rules, lower morale. Imagine the first day of your job and instead of being welcomed, you are put in training for everything you should not do and how the consequences are bad for it.
This instantly makes you think that, the poor company might have faced so many challenges with past employees that they are punishing all future employees, subconsciously thinking that you are also the bad person and they wanna warn you to not do bad stuff to them.
Imagine a smaller mastermind group that starts off with ground rules, that only talk about how to flag someone of they do something wrong.
I wanna see the rules that reward you for good behavior, instead of punish you for bad ones.