Yes, you're right - 5 is undefined and would result in the default color...
I'm not sure I completely understand your second point. I think the important thing is that (as far as I know!) the rules are always parsed left to right (at least this is my experience that the xbase parser always puts the list in the order they are written - if you think this isn't true, please let me know as it may impact here). If the conditions are not in order then the outcome will be undefined.
Does the above explain things? I can certainly try and document this - I don't think it's too difficult (??).