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REJECTs are a bit tricky.
First of all, when a user reject a content item in a step N, it leaves this step immediately (neither EXIT, not UPDATE events are called, so whatever code you place there, it won't be executed).
As stated in the manual, "If any reviewer rejects the content, it goes back to the most recent Review/Edit Revision or Review/New Revision step. If there is no such step, the content goes back to the original author (the Auto-Contribution step)."
Therefore, you'd have to place you code to the ENTRY event of the previous step; provided that it is Review/Edit Revision or Review/New Revision.
Particularly for your use case, there is also a workaround:
- place this code to the ENTRY of the 2nd Step
- place also that code to the EXIT of the 2nd Step
(this means that the value will be restored unless REJECT occurs). It is not exactly what you intended (as long as the item is in the 2nd step - for all UPDATEs - the value of the metadata field is set incorrectly)