The downside of accessing the full sensor on the iPhone 5S is that image stabilization and rolling shutter compensation is not enabled. That functionality would need to be reproduced in software instead of the ISP hardware.
Obviously, rotating your phone is going to be shakier than keeping it still.
I don't think they were rotating it. I think they were trying to keep it stable.
What would be the point of that? It says "rotate-only", it's the mode where you rotate the phone and it stays horizontal.