Any amount of theoretical explanation is not sufficient to explain scarcity/short supply unless there is a numeric measure that reflects the analysis. The rarity scale is strictly based on supply side factors  is assumed to be based on factors such as  Issue Size, Prefix.signature wise outliers , tenor of a signatory, varieties created due to errors, denomination (Higher denominations may be fewer printed than the basic unit which is aimed at mass circulation) etc.

Demand side factors  will impact prices, those cannot impact rarity, though popularity can make a scarce note rare as it gets in a collection and does not get  offered for sale often. Some common demand side factors are Popularity, eye appeal, unique design, Images of flora and fauna or some personality, portrait orientation (A front face  staring at the viewer typically is always more in demand than the side facing portrait), attractiveness that makes the banknote a desirable piece to acquire are all demand side factors that also need to be taken in to account.

Multiple of the above factors acting together can exponentially increase the demand and push a already lower availability further making it almost impossible to obtain.

Pricing  and elasticity (An economic term that signifies variation in demand linked to increase/decrease in price ) are not considered as factors impacting scarcity which is assumed to be a function of supply and demand side factors. Pricing in elasticity is often seen on scarce banknotes of higher denomination  which are popular and in short supply, so even if they start at higher opening bid price they tend to sell over the estimates. For bulk of the items which have a limited issue size the demand is however elastic. The effects of pricing are not accounted in determining rarity score

Score Details
10 over 10 Indicates an absolutely rare item with few pieces ever known, and extremely popular. An eg could be Zanzibar notes <10 pieces known
9 over 10 Limited issue size limiting the supply side  but appears once in a Blue moon.
8 over 10 Relatively larger issue size (in comparison to a score of 9) yet limited in comparison (About 100 pieces)
7 over 10 Larger supply (in comparison to a score of 8) 
5 over 10 Available  and seen regularly

The above does not account for rarities in grade or demand side impact which is reflected in price.