I've read that the setting should be with the rod loaded, as done by lifting the weights as above. On the other hand, this topic crops up from time to time so I'm not sure of the definitive answer.Dan A said:
However, I can say from my physics/maths past that being able to lift a weight means that the tension in the line is that weight, so that is the tension, less any friction from the guides, that is being placed straight on the reel. I think this means that the two ways are the same.
The 1/3 rule allows for the many factors that will put additional strain on the line or reduce the strength of the line. You identified water drag, there is of course knot strength and defects in the line and friction from the guides.