The South/West Rule has a wide variety of effects throughout the game. What actually causes it?
The South/West Rule may be related to the fact that traveling south or west causes one's horizontal spatial coordinates to increase; traveling north or east causes X- or Z-coordinates to decrease, respectively.
I therefore assume it is because the coordinates are rounded up to whole integers when it's a ambiguous situation.
The South-West rule occurs because of the way Minecraft calculates block locations. For some reason (possibly due to rounding), the collision detection of blocks is slightly off. This causes strange effects. You can see the phenomenon clearly by creating an arrangements of blocks like below, and brushing up against each corner. The lava's collision box is slightly offset, so you get damaged.
If you take a look at this post Do positive coordinate locations give more ore in Minecraft? it acctually explains everything