Rebuild Block enables you to refresh sketch entities without exiting the Edit Sketch mode.
For example:
You have a sketch entity in the upper sketch that is constrained to a block with a coincident relation.
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Click Edit Block
(Blocks toolbar) or to move the position of the sketch entity.
The result is that the block is no longer coincident with the entity in the upper level sketch.
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Click Rebuild Block
(Blocks toolbar) or to re-establish the coincident relation again.
This refreshes the entities while still in the sketch block editing mode.