OK, phase cancellation makes sense, but how about this:
(presume 2=hot, 3=cold)
To me it seems that 3 has to go to ground because if it is left isolated, it will create too much resistance to pin 2.
If its joined to pin 2, then its just cancelling itself, but if it goes to pin 1, it provides less resistance than the normal load would be.
So whats the best way to go from balanced to unbalanced then?