Is it really true that the more rules you have in the system the less effective it is in the longer term?

I understand the concept of back filtering but still not quite sure that a system with more rules has more probabilty of failing.

If you generate a system with 3-5 rules with 40,000 selections - 25%SR - 10,000 winners at avg of $5.00 thats a POT of 20% ($10,000 - profit). Just an example.

If you restricted that to 15 rules and come up with only 2000 selections for 40% strike rate for 800 winners at avg of $5.00 you have a profit of $2000.

Betting level stakes would seem to continue with the 3-5 rules at Profit is more, but with confidence in a higher strike rate you can use a larger stake of your bank like 5%, instead of 1-2%.

Back to my original point, by filtering more rules why does everyone say its setup to fail? Is confidence increased by not on the amount of horse races bet on or is it by the number of meetings tested and eliminated when they don't fit the criteria?

Just interested to know others thoughts?