On offense, at times in the game where it seemed like an important moment we would 'play them down the field'. Very short after first downs, or sometimes others. Something like one phrase of Go Big Red. Wouldn't do it if they were right in front of us though.
Yes it is in the rules. Yes, I have heard bands called on it or opposing coaches complaining, but never happened to me. I think one factor is how you are doing it. If you are playing a song or chant type thing (we had one we used especially for defense) it will probably fly. If you just make noise, more likely to get called on it - there is also a rule against anyone in the stands using 'noisemakers'. Airhorns, etc., and if you are doing just 'pick-a-note-and-blast' stuff I think you are more likely to get called on it.