You have done really well in your studies, and your backtest numbers seem to match the claims, so I do not understand the concerns! Your back-testing clearly states using highest RSI, so thanks for answering my doubts! 
Focusing only on the quarterly re-balancing figures, “Period 2” (yellow shaded) looks to me a perfect match for the claims vs results. 
Drawdown will always happen, there is simply no escape, when entire market bottom falls off and stays so for a while. Only frequency, duration and size can be controlled. This strategy follows a strong positive trend and stays invested, so that is bound to happen anyway. Looks very good in these aspects also, since it seems to not perform worse than the general market in these drawdowns.
If no (or lesser number than total holdings) fresh stock picks are found for the strong positive trend criteria then exiting previous positions instead of holding them can help escaping the market falling. Though trying to get the timing right will mean much higher churn, or maybe a discretionary triggering. 
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