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Why do I see objects with public read/write permission having a section for sharing rules in the sharing settings.Should only private and public read only not be open to creation of sharing rules.

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This is because the page in Salesforce is designed to include all the objects that can have sharing settings as well as the Organisation Wide Defaults rather than having to dynamically generate the list of objects for sharing rules.

It is not possible to create a sharing setting for an object with Public Read/Write however many organisations may well have a mixture of settings, e.g. if External Sharing is enabled, then it may be that an object is Public R/W for internal and Private for external so sharing rules will need to be added for say Partner users to allow them to see the relevant data in that object.

Further information is at Salesforce documentation

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