To study the order-to-chaos transition in nuclei we investigate the validity of the K-quantum number in the excited rapidly rotating ¹⁶³Er nucleus, analyzing the variance and covariance of the spectrum fluctuations of ¿-cascades feeding into low-K and high-K bands. The data are compared to simulated spectra obtained using a microscopic cranked shell model. K-selection rules are found to be obeyed for decay along excited unresolved rotational bands of internal excitation energy up to around 1.2 MeV and angular momenta 20I40. At higher internal energy, from about 1.2 to 2.5 MeV, the selection rules are found to be only partially valid.