I am thinking, that the greater value of theta the more downward force component will be generated by the rail forcing the ball into the cloth, which will cause cloth friction to reduce momentum of the ball.They take the 70% number and convert it to the parameter theta, which is the angle from the center of the cue ball up to the (single, ideal) point where the ball contacts the cushion. The angle theta then appears prominently in most of the following equations.
If you are saying that they are over-estimating the rail height, and the actual true rail height is closer to the center of the ball, then the rebound velocity should be greater then their analysis? Not less?
I also think what I am trying to understand from this paper is that the rail itself, does not absorb energy (mostly). All energy is absorbed by cloth-ball friction (rail cloth and table cloth). The only place energy can go is into either heat, permanent deformation (inelastic collision) or back into the ball. Have you found this not to be true?