That's a bad coding style document. There's no rationale given, except for a bunch of references at the top, which are clearly argument from authority.
I think the no "loop initial declarations" is for consistency with "all declarations at the top". Other coding style guides favor "declarations as close as possible to first use", including guidelines for mission critical systems (if you resort to argument from authority I have some too...) [1].
As much as I like Suckless, this section is just pet peeves that can safely be ignored; unless you submit a patch to a project that aligns with it.