At Google Books one can see an essay, Subjunctives by H.W. Fowler, included in an anthology called Index to Tracts I-XIX. Google Books found the quotation (“And if exceptional action were needed to prove love, what would after all be proved, except that love were not the rule?”) here and in several other collections and in the book you site, Modern English Usage; but Google would not let me read any of those other works. I don’t know how the various presentations of Fowler’s writing are related, but the passage that I saw seems pretty close to your restatement of Fowler.
To those who have had to do with Latin and Greek grammar, there will
be a familiar sound in Sequence of tenses and Sequence of moods; what
is implied in the terms is that it may be necessary to use a tense or
a mood not to convey the meaning peculiar to it as such, but for the
sake of harmony with the tense or mood of another verb on which it
depends. The principle has its place, though little is heard of it, in
English grammar also; it is mentioned here because the most likely
explanation of the subjunctives now to be quoted, some clearly wrong,
some at the best uncalled-for, seems to be a hazy memory of sequence
of moods; after each example the supposed reasoning is suggested, not
as sound, but as conceivable.
It seems that Fowler's cards are close to his chest. He says that some of the quoted examples are clearly wrong, and some are at best uncalled-for, but reflect a hazy memory of sequence of moods. But some of the quoted examples sound perfectly normal to me. So I don't think that Fowler is listing only bad examples. For some reason he's just listing examples indiscriminately.
So to your questions: Does anyone know a little bit more about this? Of course it sounds silly, and especially so now because the subjunctive is moribund. But did it really have its place?
First consider this passage from the same article by Fowler.
Why should ordinary shop-assistants enjoy a half-holiday, as is
proposed in Sir William Bull’s Bill, while the staff behind the
scenes, often working underground and before a scorching fire, be
denied this privilege? ‘Why should assistants enjoy’ is in the
subjunctive; therefore the subordinate clause requires ‘the staff be’,
not ‘is’, ‘denied’.
Fowler’s point is this. Sometimes words are subjunctive to indicate their counterfactual status. For example, in the word “If I were king, I would make a law,” the word “were” is subjunctive to concede that I am not in fact king. But in the words “If I am a king then why did you not come sooner?” the word “am” is indicative, not subjunctive, to allow the possibility that I am king. But the subjunctive phrasing that Fowler quotes is not counterfactual; the staff is in fact denied this privilege. The subjunctive is required (although the words are not counterfactual) simply because the sentence began in the subjunctive, with the words “Why should assistants enjoy.”
Now consider this passage from “Imperialism (Flag of an Empire)”, a speech William Jennings Bryan delivered on August 8, 1900, around the time Fowler published his first article.
Some one has said that a truth once spoken, can never be recalled. It
goes on and on, and no one can set a limit to its ever-widening
influence. But if it were possible to obliterate every word written or
spoken in defense of the principles set forth in the Declaration of
Independence, a war of conquest would still leave its legacy of
perpetual hatred, for it was God himself who placed in every human
heart the love of liberty.
Here, as in the words Fowler quotes, the speaker employs the subjunctive simply for consistency with the earlier use. Bryant does not deny that wars of conquest leave a legacy of perpetual hatred. He believes that they do. But if it were possible to obliterate every word, wars of conquest still would, not do, leave their legacy of perpetual hatred.
It seems plausible that Fowler and all of us here at the Stack Exchange agree that the Sequence of moods had, and has, its place in English, in Fowler's day and in our own, in statements generally like the ones that Fowler quotes; but the specific example you quoted (“And if exceptional action were needed to prove love, what would after all be proved, except that love were not the rule?”) is written badly.