Here's is a little more information I've discovered. If the design feature has a work function of "Install" then the validation "Rule A" fires as expected. But when the work function is "Replace" the validation rule is not fired. There is no logic within the validation rule itself that filters for work function. Wondering if something in the validation rule framework itself somehow branches on work function.
Also, there is nothing in the event log, and yes the feature class to which the rule is assigned is "Designer- fied".