It says in the SU Help on the Linear Inferencing Toggle that for the line tool, inference can be put off by the alt key on Windows. Is this also applicable when drawing a rectangle? On pressing the alt key makes the rectangle disappear and then is completed on click, to where the disappear happened. Seems it will not work for the rectangle. The locking plane can be made by the arrow key, but not other inferences that keep disturbing what is not intended.
no, because a rectangle is not a line.
the idea behind inferences is that they’re here to help you. judging by the way your model is displayed, and the point you chose to start your rectangle on, sketchup provides several “inference snaps”. if you’d clicked elsewhere, you’d have gotten a different result. and yes, arrows can force lock inferences. up for blue, left right for red green, and down will force lock inference based on the last line / face you hovered on with your mouse.
Btw, curious, why is your blue axis completely reversed ?
And… I’m not sure I’m seeing the problem / question here, since you answered yourself the line / rectangle inference difference 
I am not able to make the blue axis point up. After I set the red and green. The blue invariably points down. Can it be made up? Asked this before.
Change the direction of the red or green axis so the blue points up.
You cannot turn inferencing off.
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Agree the intent of inference but when I don’t want it to infer I should be able to switch off?
I was trying to keep the red for the model width direction and green for the depth.
You can do that as long as you run them in the right direction.
Why do you need the red aligned with the width and green for depth?
Since group and component axes are naturally aligned with the model axes during creation, you could just create them such that their width is aligned with the red model axis and their depth is aligned with the green model axis. Then you don’t have to bother changing the goup or component axes at all.
I just wonder if the Rotated Rectangle tool would work better for what you are trying to do.
Was trying to keep a convention. I realize the directions cannot be interchanged without changing the 3rd.
For components brought into a model. Is it required to align it with the model axes?
No, but if you want the component to align with model axes it helps. When I create components to use in future models I do align their axes and position their origins to make insertion easy. I do that for all cabinet hardware, for example.
Are you saying to draw the rectangle in a vertical plane and then rotate it into place. Perhaps draw and move it in.
I was just describing how it is difficult to draw a rectangle near where there references that SU will inference. There must be work arounds which I am missing?
Will it make a difference if I had the blue pointing downward for the model and for the component pointing upwards.
Yes. As I wrote, the component will come in with the component’s axes aligned to the model axes. If you’ve arranged the component’s axes so the blue axis points down, the component will come in upsidedown.