This rule dates back to the time when everything was on a flat network, and when we were using hubs. Now that every switch port is a collision domain, and that collisions no longer exist in full-duplex, this rule doesn't apply anymore. Nowadays, we use instead the Spanning-Tree diameter of 7 layer-2 hops maximum. In a cascade using gigastack gbics, there is only 1 hop between any 2 switches. This is why is works.
