You are correct, it is not a bush, it is a sleeve.
The question is, why put it in the fork?
The answer is you put it there to block off the hole in the stantion when the slider moves down towards full extension, thereby creating a 'hydraulic cushion effect' by restricting the flow of oil near the end of the stroke.
So it makes sense to make sure it is in the correct position. If it is not it could block the hole off too early, restricting the flow too early. Of course the oil will find other paths to escape, but that is not the point.
You are right, of course, the fork system and study of where the oil is going at all times is not simple, and is not a precice thing, but if you buy the concept of putting it in the fork, then why not ensure it is in the right position?
You are also correct, in reality the fork action will constantly be returning the sleeve to the top if it falls down, but again, thats not the point, you want it to be there all the time, so it restricts the flow of oil at the right slider position, i.e. just before full extension.
RGM now sell a long fork bush instead of the additional 'sleeve'. Why? To make sure it stays at the top, I reckon.
Of course that is why this forum is so good, because we can all give opinions and advice.
But I am quoting the guy who came up with the theory, and originally started manufacturing the kit.
If you don't buy his theory, and take his advice, then why bother installing his modification in the first place?