Rabada will miss the last match of the series at The Wanderers after being sanctioned for his reaction to dismissing Joe Root on day one of the third Test at St George's Park.
The paceman roared in celebration after bowling the England captain and that resulted in him being found guilty of a level one breach of the ICC code of conduct.
It earned Rabada a fourth demerit point in a two-year period, a tally that triggers a one-match ban.
Boucher felt Rabada should have known better, but suggested the punishment was harsh after watching England take charge in Port Elizabeth by posting 499-9 declared before the Proteas were reduced to 60-2 in reply on Friday.
"I think KG has a bit of a history, he probably shouldn't have done it, but it is what it is," said the South Africa head coach.
"The level one is a slap on the wrists but unfortunately he's got too many demerit points. We played in days when bowlers used to swear at batsmen, you want to be nice and aggressive.
"He didn't look at Joe Root, but it's about how you determine the laws. KG is best when he's nice and aggressive. We'll get him to run to square leg rather than the batter. But the laws are there and you have to abide by them.
"I wasn't aware of all the demerit points [Rabada has] and how the whole system works, so to hear this morning he's going to be banned for the final Test is a massive blow for us.
"He's a world-class performer, especially at The Wanderers, where I think he would be very effective."
The former South Africa wicketkeeper-batsman added: "We spoke to the match referee [on Thursday] and we did voice our concerns over the rule and a couple of variations of the rule.
"It's a tough one to gauge about excessive celebrations in the area of the batter and making contact with the batter.
"I don't feel that he made any contact with the batter whatsoever. Yes, he was in his space, but the two put together there is probably different ways you can look at it. Bottom line is the match referee has made up his mind."
Despite a late wobble with the bat, England claimed victory with 40 balls unused on Sunday to ensure the three-match series finished level at 1-1, the second game in Durban having been washed out.
Boucher felt his team were "30 to 40 runs short" when making 256-7 with the bat, while they then made an abysmal start with the ball as Jonny Bairstow (43 off 23 balls) got stuck into Lungi Ngidi and Beuran Hendricks.
Although South Africa fought back, dropped chances from Joe Denly and Tom Banton hindered their hopes of turning things around.
"We were probably 30 or 40 runs short and then, with the ball, we just started off really, really poorly and we were playing catch-up after that," said Boucher in a news conference.
"We had chances and we didn't take our opportunities. When you are 30 to 40 runs short, you have got to bowl well, especially up front, and you've got to take your opportunities.
"We didn't do that. That's why we lost."
South Africa and England both rested frontline players for the ODI series, and Boucher indicated the Proteas would continue to experiment in their next 50-over matches against Australia.
"It's a long time until the next [50-over] World Cup, so we can afford to do that," he added.
"There are a lot of good things that happened and a couple of things we need to work on, obviously, but it is quite difficult to judge over two games.
"We'll probably use the next three games against Australia to find out some answers and ask some questions. We do believe we're going in the right direction."
Former skipper Faf du Plessis is likely to return against Australia, though, after being rested and replaced as captain by Quinton de Kock for the ODI and T20 series with England.
"We feel at this point in time he [Du Plessis] needs a bit of a break away from the game," Boucher explained.
"I would like to think, against Australia, the rest will be enough and they [Du Plessis and Kagiso Rabada] can come back and play."
The Proteas suffered a nine-wicket defeat in the third and final Test of their tour of England at The Oval on Monday, losing the series 2-1.
Boucher took on the role in December 2019, signing a four-year deal and going on to secure 11 wins in Test matches, as well as 12 ODI and 23 T20I victories.
South Africa are currently second in the ICC World Test Championship table, despite their loss in England, and Boucher's last games in charge will come at the T20 World Cup in Australia, which runs from October 16 to November 13 later this year.
A statement from CSA on Monday outlined that Boucher had resigned to "pursue other opportunities in line with his future career and personal objectives".
"While Cricket SA greatly regrets that Mr Boucher is unable to see out the term of his contract, it respects his decision and wishes him all the best in his future endeavours," the statement added.
The former Proteas wicket-keeper earned 147 Test caps during his playing days between 1997 and 2012, scoring 5,515 runs at an average of 30.30.
CSA Chief Executive Pholetsi Moseki thanked Boucher for his efforts in the role, saying: "We would like to thank Mark for the time and effort he has invested in South African cricket as the head coach over the past three years.
"He has helped navigate us through some rough waters following the departures of so many senior players through retirement and has helped lay some strong foundations for the next generation of Proteas.
"We are extremely grateful to him for the work he has done and would like to wish him well with the next chapter of his career."
CSA also confirmed it "will in due course announce its intentions regarding a successor to Mr Boucher".
Cricket South Africa announced following the Test series defeat to England this week Boucher was set to step down to "pursue other opportunities in line with his future career and personal objectives".
The 45-year-old has quickly secured a new role in the Indian Premier League, joining Mumbai for the 2023 season.
"It is an honour and privilege to be appointed as head coach of MI," Boucher said in an Indians statement.
"Their history and achievements as a franchise clearly put them up there as one of the most successful sporting franchises in all of world sport. I look forward to the challenge and respect the need for results.
"It's a strong unit with great leadership and players. I look forward to adding value to this dynamic unit."
England captain Joe Root took 4-31 in Port Elizabeth after Mark Wood struck twice to ensure England require just four wickets on the final day to take a 2-1 lead with one match to play.
The Proteas were all out for only 209 after losing their last four first-innings wickets for only one run early on the penultimate day and they were in deep trouble on 102-6 - trailing by 188 runs - following on at stumps.
South Africa head coach Boucher offered a frank assessment of his side's shortcomings following a painful rain-affected day, which left them surely relying on the weather to save them on Monday.
"I think we were outskilled, to be honest," he told Sky Sports. "You can blame different things for the situation but I've got to look at myself and find a way to get the players up mentally and upskill them in a short space of time.
"I do think Joe Root was difficult to play at the end there. It's difficult to get down to the pitch of the ball - one slides on, one turns and it's like quicksand, the harder you try the deeper you sink.
"But we've created this situation for ourselves. No excuses - we've got to man up now and take this forward and learn from these lessons.
"When you're under the pump for a long time, every side has its breaking point and today we broke quite early, which is disappointing."
Faf du Plessis went 54 balls without scoring at one point before he was sent packing by part-time spinner Root for 36, but Boucher insisted it is not time to discuss his future as captain.
"That's not a call to make a this moment in time," Boucher said. "He's trying really hard and working really hard away from the game.
"If he's not scoring runs there's that extra pressure. The best way to answer that is putting runs on the board.
"There's no hiding place in Test cricket. He's disappointed from a team perspective. He spent a bit of time in the middle, which is good for his confidence."
England captain Joe Root took 4-31 in Port Elizabeth after Mark Wood struck twice to ensure England require just four wickets on the final day to take a 2-1 lead with one match to play.
The Proteas were all out for only 209 after losing their last four first-innings wickets for only one run early on the penultimate day and they were in deep trouble on 102-6 - trailing by 188 runs - following on at stumps.
South Africa head coach Boucher offered a frank assessment of his side's shortcomings following a painful rain-affected day, which left them surely relying on the weather to save them on Monday.
"I think we were outskilled, to be honest," he told Sky Sports. "You can blame different things for the situation but I've got to look at myself and find a way to get the players up mentally and upskill them in a short space of time.
"I do think Joe Root was difficult to play at the end there. It's difficult to get down to the pitch of the ball - one slides on, one turns and it's like quicksand, the harder you try the deeper you sink.
"But we've created this situation for ourselves. No excuses - we've got to man up now and take this forward and learn from these lessons.
"When you're under the pump for a long time, every side has its breaking point and today we broke quite early, which is disappointing."
Faf du Plessis went 54 balls without scoring at one point before he was sent packing by part-time spinner Root for 36, but Boucher insisted it is not time to discuss his future as captain.
"That's not a call to make a this moment in time," Boucher said. "He's trying really hard and working really hard away from the game.
"If he's not scoring runs there's that extra pressure. The best way to answer that is putting runs on the board.
"There's no hiding place in Test cricket. He's disappointed from a team perspective. He spent a bit of time in the middle, which is good for his confidence."
Cricket South Africa (CSA) has opted to split coaching duties, with Conrad taking charge of the Test side and Walter the limited-overs teams.
Mark Boucher had been head coach for all formats but brought his reign to an end following the T20 World Cup in Australia late last year.
Malibongwe Maketa stepped in on an interim basis following Boucher's resignation, overseeing a 2-0 Test series defeat in Australia.
The new coaching duo have reportedly signed four-year contracts.
A former first-class cricketer, Conrad has coached the South Africa Under-19 side and now gets his chance with the senior team in the longest format.
Dean Elgar's side look highly unlikely to qualify for the 2023 World Test Championship at The Oval following that series loss in Australia.
Walter was previously employed as South Africa's strength and conditioning coach and has the task of turning around the Proteas' white-ball fortunes, with qualification for the 50-over World Cup in India not yet secured.
South Africa failed to progress from their group at the T20 World Cup after suffering a shock defeat to the Netherlands in November.
Smith was accused of racial bias against black leadership at Cricket South Africa (CSA), discrimination against Proteas wicketkeeper Thami Tsolekile and unfair racial treatment surrounding the appointment of Mark Boucher over Enoch Nkwe in 2019.
The former Proteas skipper was under review by Dumisa Ntsebeza SC after CSA's Social Justice and Nation-Building (SJN) process, with Ntsebeza unable to conclude on "definite findings" in December 2021.
The initial report criticised Smith and former captain AB de Villiers for selection decisions, which it said were prejudicial towards black players, allegations the pair both denied.
That led to further formal processes, with two independent arbitrators Ngwako Maenetje SC and Michael Bishop reviewing the case, before Smith was cleared of the allegations of racism.
Smith, who held the CSA director role between 2019 and 2022 before his contract ended in March this year, has also been reimbursed his costs by CSA on the advice of the arbitration.
Lawson Naidoo, chairman of the CSA Board, said after the decision: "The manner in which these issues have been dealt with and resolved by the arbitration proceedings confirms CSA's commitment to deal with the SJN issues in a manner that treats them with utmost seriousness but also ensures fairness, due process and finality.
"Now that finality on these processes has been reached, it is appropriate to recognise the extraordinary contribution that Graeme has made to South African cricket, first as the longest-serving Test captain in cricket history and then as director of cricket from 2019 to 2022.
"His role as director has been critical in rebuilding the Proteas men's team in particular and has laid a solid foundation for his successor.
"We fully appreciate that after his time as director, Graeme wants new challenges in the commercial and cricket worlds.
"He has a long career ahead of him and we very much hope that he will still work in the cricket world in appropriate capacities going forward."
CSA apologised for the unwarranted public disclosures of Smith's personal information, including his remuneration, during the SJN process, as they thanked the 41-year-old for his efforts in charge.
Pholetsi Moseki, who is CSA's chief executive, added: "On behalf of the executives, staff and players at CSA, I would like to thank Graeme for all that he did as the director of cricket.
"He put up his hand at a particularly tumultuous period for CSA and he has often gone beyond his contracted duties to assist CSA during his term."
The Proteas will be in action for the first time since March when they host England in three Twenty20 matches and a trio of ODIs from November 27.
South Africa's elite cricketers wore Black Lives Matter armbands and took a knee prior to a 36-over charity match branded 3TeamCricket in July – the first live game in the country after the sport was placed on hold amid the coronavirus pandemic.
Flags will fly at half-mast during the opening T20 at Newlands and the second match at Boland Park to coincide with five days of national mourning for victims of COVID-19 from November 25 to 29 declared by South Africa president Cyril Ramaphosa.
Boucher said the Proteas will not take a knee versus England because they hope to aid the fight against racism through lived experience instead of such gestures.
"I have spoken to the guy [Lungi Ngidi] who was driving the whole movement within our set-up, he is pretty happy that we have done what we needed to do, in particular at that [3TC] game," said Boucher.
"There are a couple of other issues that our president has raised going forward with regards to gender-based violence and the victims of COVID. We are going to be addressing this with the team so if there is a black armband to wear, we will probably be wearing it because of the president's call.
"It's an ongoing thing for us. It's not something that we have to continue to show, it's something that you have to live. That is exactly what we are trying to doing our dressing room at the moment with a big squad.
"If the guys who brought it up are happy with it, that's great, but if they feel we have to do more, that will be a chat and they are open to express their opinions.
"Our new value system is about respect, empathy and belonging and all of those lead to an environment where guys feel free and open to talk about these hard issues.
"They've certainly got the support and respect and empathy from every other player."
Cricket South Africa confirmed on Wednesday that three members of the squad were self-isolating after a player tested positive for COVID-19 prior to entering a bio-secure environment in Cape Town.
