I don't know why anyone would ever tell you to put any part of the rod in the hole. All you'd do is negate the entire purpose of fishing with a rod. You control the fish with the rod. The rod is there to take the shock off the line. The rod is there to apply resistance in order to tire the fish. It's kinda like a fish Bow flex. You have to be able to raise and lower the rod depending upon whether the fish is running up or down, away from you or towards you. It's an extension of your arms.
Why would you want to point the rod at the fish, relying only upon the strength of your line and your drag. And remember, that drag better be loose if you're shoving a rod down the hole. Wouldn't you rather use your drag, your line, the flex and power of your rod, along with your arms and hands while fighting a fish? And with the right weight rod, you can fish a tighter drag, and/or, a lighter test line, all to your advantage. And, I've never had a line break because of the ice hole. Worried about stretch, No problem. With mono up to thirty feet deep, you'll get a good hook set. Over thirty feet use fluorocarbon.
Here you can see a fish running up and down the water column during the fight. While playing the fish, you have to be able to adjust the position of the rod, using your hands and your arms. How are you going to do that with the rod down the hole? You've taken them out of the fight. And it's easy to see how important the power and flex of the rod is when fighting a fish. Once again I ask. Why would anyone want to stick a rod down the hole and rely on nothing but their line and their drag? And remember that slack in the line when the fish turns and runs towards you, it's much faster and easier to pick that slack up if you can move that rod.
Remember, that ping you hear when the line catches on the edge of the ice is nothing but music to your ears, letting you know that you have a nice fish on.
Poor video with the watermark, but you get the drift.