What does processor occupancy -rule mean?

It refers to the processor occupancy rating that you can see by pressing letter O when driving. If the percentage is over 100, then the time of the game slows down and the driver has more time to react.

If you do not use GP2LAP

Drive a slow lap around the track keeping O pressed down, if the number rises above 100 at some point, then there is unrealistic time warp and you should either take off some detail or use lower framerate (or get a faster computer).

So if you can drive around the track with no over 100% occupancy at any point, then it is no more necessary to check the occupancy in the hotlaps you make in that same track with the same graphics settings.

If you use GP2LAP

This is the recommended way and it has benefits for you, too. GP2LAP logs some additional information (for example the processor occupancy) into the hotlap file. This data can be viewed using HOF2LAP. The occupancy values shown in this way are slightly smaller than with the other method, but everything under 100% is accepted. 1