Hi, Daveteo, as you yourself have said, there are no rules in a
fight. (Actually there are still laws and social mores, but never
mind.) A truly "realistic" fighting competition should involve
multiple scenarios, including uneven numbers, disparity in weapons
(bare hands versus knife, for instance), uneven terrain, and
surprise elements (e.g., getting ambushed from behind halfway
through the fight). Hence, "no holds barred" competitions like the
UFC still are very far from capturing the majority of primary
factors in a fight.
The very presence of a referee, the safety net of being able to
tap out or throw in the towel, and the certainty of when and how
the fight is going to start also change the milieu completely.
Therefore, rules are always in place in a competition, and even
the UFC has a huge set of explicit and implicit ones. Certain rules
favour certain fighting styles or mindsets, certainly, and it is
thus common for fight organizers to set up the rules so as to give
the advantage to their own guys. And then there's the safety issue.
Nobody wants to get sued, and nobody wants to have someone die or
become crippled during their tournament.
It's true, I guess, that the more unfamiliar rules there are,
the more restricted one becomes. A part of your mind gets caught up
in remembering to dampen your natural instincts, which could
totally change your game plan, flow, etc. Perhaps you could
approach such events as just-for-fun exercises to see how you would
do under different circumstances? Sparring is never the same as
real fighting anyway, and even real fighting spans a huge range of
situations and consequences.