Imagine bending a piece of wood. If you exert some force, you can bend its shape a little bit. If you let go, it will spring back to its original shape. If you bend it too far, though, it will break. And then it won't spring back.
The analogy is that you can bend and break a rule just as you can bend and break a piece of wood.
Bend the rule means to slightly violate a rule in order to adapt to some special circumstance. The rule continues to prevail.
Not any change, adjustment, or exception to a rule is bending a rule. The word bend is chosen to contrast with break. Breaking a rule means simply violating it. Calling it bending means that you're violating it only a little bit, usually to serve a purpose more important than the purpose served by the rule. For example, if it's illegal to allow someone under 18 to see an R-rated movie, but a 17-year-old whose birthday is next week wants to see it, he's going on a six-month trip to Japan tomorrow, the movie closes in two days, and the movie is about the town he's visiting in Japan, you might bend the rule and let him in. Making an exception for an 8-year-old for no reason other than that he wants to see it would merely be breaking the rule.
Bend the rule has either a connotation of reasonableness or a connotation of deviousness. Both these connotations occur in the example.
First, it's pointed out that "we need a better team than last year". Whatever the purpose of the first-year rule, surely it's overridden by that consideration. That sounds like a reasonable bending of the rule.
Later, it's pointed out that the person in question is not just a first-year, but extraordinarily young. The purpose of the first-year rule must have something to do with protecting young students. So, calling this "bending the rule" was actually devious. The reasonable-sounding explanation turns out to be a very bad reason: the rule is actually being very severely violated, to serve a purpose (winning) that's less important than the purpose of the rule.
People who bend rules frequently are usually seen as devious or careless. Occasions that call for bending rules don't come up all that frequently, or probably the rules would be different. So, a person who bends rules frequently is probably not respecting the legitimate reasons for those rules, either because they don't understand those reasons or because they're just cheating.
People who never bend rules are usually seen as unreasonable or narrow-minded. Reality is endlessly complex and rules are relatively simple and rigid. Occasions that call for bending a rule do happen sometimes. A person who refuses to bend a rule on such an occasion probably doesn't understand the basis for the rule. Lacking insight, such a person can only apply the rule literally and thoughtlessly.