In Bud, Not Buddy, what does rule number 118 mean?

Rule number 118 is a long rule.  There's actually a couple of parts to it.  I'll start with the very last part.  

They Won’t Take Everything Because If They Did They Wouldn’t Have Anything Left To Hold Over Your Head To Hurt You With Later.

What Bud has become intimately familiar with by age ten is that adults like to punish children by taking things away from children.  I'm not going to lie, I use that tactic with my own children.  The last part of rule 118 explains that an adult won't take everything away from a child, because then the adult can't use the threat of taking something away anymore.  It would be like threatening to shoot somebody with your thumb and index finger held up in the shape of a gun.  There's no real threat there. 

The first part of the rule really shows Bud's understanding of the "adult taking stuff away" tactic.  

You Have To Give The Adults Something That They Think They Can Use To Hurt You By Taking It Away. That Way They Might Not Take Something Away That You Really Do Want

Bud explains that he knows that he has to make adults think that they are taking something away from him that he cares about.  That way the adult feels like the punishment is working, but if the item is really taken away, it's no big deal.  That's why Bud begs Mrs. Amos to not send him back to the orphanage.  Mrs. Amos is now likely to do that, because she feels like it will hurt Bud.  But going back to the home is exactly what Bud wants in the first place.  

"Please don't call the Home, please don't send me back." Shucks, going back to the Home was just what I wanted to do, but I was being just like Brer Rabbit in one of the books Momma used to read to me at night when he yelled out, "Please, Brer Fox, don't throw me into the pricker patch, please, please!"