Well, Neal, could you imagine that the bidding goes like this – S 1 Heart, W 1 Spade, N 2 Spades (thus forming a partnership with W) E pass, S 4 Hearts and everybody passes. In such a situation, partnership has been formed by W and N, neither has entered any ...
There is a mistake in the rule:
It is allowed to outbid any call on the same level with any suit, on condition it hasn't been bidden earlier by another player.
The words "by another player" should be deleted!