Looping is very slow on large data set

You can simply delete not wanted RwNum(s).

DELETE 
FROM #Final 
WHERE RwNum IN (
                                SELECT IIF(a.RwNum > b.RwNum, a.RwNum , b.RwNum)
                                FROM #Final a
                                JOIN #Final b 
                                ON ( a.JobSource = b.JobSource AND a.RuleName = b.RuleName )
                                OR ( a.JobSource = b.JobSource AND a.PackageType = b.PackageType AND a.RuleName IS NULL )
                                WHERE a.RwNum <> b.RwNum
                                )

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Saeid Hasani [sqldevelop]