RF out does contain the raw video data straight from the heads (this the only input VHS_Decode needs to fully reconstruct the image actually), but the TBC is not trying to decode any of the actual information there. All it does is check if the amplitude (height) of the raw waveform drops below a certain threshold (hence why they call it a dropout). By getting to tap into that amplitude, the TBC knows exactly when a dropout is occurring in real time, and the TBC starts replaying the last good line of video it has stored in its buffer over and over until the signal goes back above the threshold level. You actually get to adjust the specific "threshold" of what you want the TBC to consider a dropout to be which essentially lets you set the sensitivity. You definitely can't do that on VTRs with traditional dropout compensation.
Most newer tape players have built-in DOC, but most don't work the same way as a standalone TBC would. With a standalone TBC, the data replayed comes from a digital buffer and is perfectly replayed each time, whereas traditional internal dropout compensation comes from some sort signal stored in a crystal or IC (in a non digital form) that gets weaker each time the line is replayed from it (including even the first replay) hence you get those sort of horizontal purple discolorations which is what I personally would like to avoid. Better than looking at static or pure black lines I guess.
This info is all about reading from it, I've got several TBCs with DOC inputs, but no players that have RF output to actually see it in action unfortunately. It is possible that tapping the RF test point separately would then essentially "overwrite" the VTRs internal DOC, but that may be theoretically possible. Again, the hope would be that it gets rid of the purple horizontal lines during dropouts.
You should always use external DOC and ADV SYNC (synchronizes the playback speed to what the TBC is expecting to receive) if it's an option for the reasons above. Not saying that you *have* to buy a new TBC or anything, but if you do want the highest quality captures, Using DOC/RF out should be a given, but I wouldn't take my word for it (since I've never had the opportunity to see it in action), probably would ask someone who has done it both ways to see what advantages they saw or didn't see.
Fun Fact (I think - at least if the TBC-IV manual is correct) - Looks like the DPS-235 that you have does support both DOC and ADV Sync, but you'll need to make a cable that goes from that 9 pin Multi/IO port to two BNCs.
I have a DPS-235, but I can't confirm that those features work since I don't have any machines with RF Out/Sync In.
DPS-235MultiIO.jpg