I may be wrong, but I’m pretty sure the primary function of a rag joint is vibration isolation.
Keeping the hydraulic high frequency vibration out of the steering wheel.
Rag joint systems are usually used in conjunction with at least one universal joint. The joint accommodates the misalignment, where the rag joint stays straight.
I’m sure they allow a little misaligned as well, but I don’t think it would be very desirable to have the rag joint do all the flexing. They would wear out prematurely if the deflection was large enough.
Same with it being a bad idea to have the rag joint mounted down by the steering box, as lots of vehicles were. Once they become contaminated with oil, they deteriorate much quicker.
There are some dry rag joints out there that are 50 years old and better. Whereas some fluid soaked rags were already falling apart in the 70s.