IMHO, coalesce and rebuild are VERY different concepts (I´m speaking in general here, not specifically about indexes).
Imagine the following situation : you have data for the object A, another object B and a C , D and E objects, this way :

|A|A|A|A|B|B|B|B|B|C|C|C|C|D|D|D|E|E|E|

IF I remove B and C data, I will have in disk :

|A|A|A|A| | | | | | | | | |D|D|D|E|E|E|

The empty spaces from B and C are CONTIGUOS, in THIS CASE coalesce will "join" these empty spaces in one unique large free space chunk.

OTOH, if in the original situation I remove B and D objects, I will get :

|A|A|A|A| | | | | |C|C|C|C| | | |E|E|E|

The free chunks are NOT contiguos, SO coalesce will NOT be able to reclaim it and join them in one, LARGER free chunk. In this case, only REBUILDING the object the space will be reorganized to gain more CONTIGUOS free space. I enfatize the ** CONTIGUOS ** : if Oracle needs to create a 10Mb extent but it have in disk only 5 free chunks of 2 Mb each, it bombs. In this case, you will need coalesce or rebuild, to get the 10 mb contiguos space needed.

Regards,

Chiappa