Tip rubbing is where you rub the tip in a circular motion against the palm of your hair. The action is similar to using a pestle and mortar and you work the tip of the dreadlock into a ball shape. This action simulates wear and tear on the tip of the dreadlock that would over time cause some dreads to blunt so tip rubbing is an alternative to crocheting when it comes to trying to blunt tips.
Tip rubbing will not work for everyone as your dreadlocks need to already be on their way to being mature before the tip rubbing will even have a chance because the tip already needs to be partially locked - you can't tip rub on a dread that has 6 inches of loose hair at the end!
Tips formed with tip rubbing are not guaranteed to hold their shape and will often take a lot of work to get them good and solid and some people might not find it useful at all.
Tip rubbing like all friction based maintenance techniques does wear on the hair so excessive, continuous or long term use can eventually lead to hair damage, but damage at the tips is far less worrying than damage elsewhere - the roots for example.