Lucas here, with Rachio Support.
@obmd1 -- Great question! I'd have to check with the developers with regard to one or the other check taking priority. I'm sure it's defined somewhere at the code level, and would be happy to confirm. However...
In your case, it sounds like the freeze skip took priority. I'm not certain whether a rain check was still performed, but logically it would make sense not to. (In programming terms, we would call this a short circuit evaluation, wherein the first actionable Y/N condition results in ending any further evaluation.)
I agree with @Linn as well, in terms of a rain sensor simplifying things. However, we feel that predicting weather is often superior to simply measuring it. (In the latter case, the water may be cut only after it is too late.)
Of course, doing both is preferred.
Hope this helps. Happy watering!