he can still race in the TT if a team that has an entrants liscence puts him on one of there bikes. For arguments sake if a rider in one of the top teams could not race at the TT through injury or whatever but already has been entered his team can fill the ride with whoever thety like.
This rule does not apply if you have had an entry refused already. M Rutter has not had an entry refused, therefor he can ride.