If the tape were just a lubricant, a quick dip in some motor oil would solve all the leaking issues. The rest of it depends on what materials we are trying to seal. If you look at the threads on black gas pipe, galvanized, and similar, you will note that the threads are very rough and you may get them to seal with lube but something will need to fill the small imperfections to make a seal.I've always understood the tape to be a lubricant vs the actual sealant. NPT thread are interference type threads, so, the tighter you get them, the better they seal. The corollary to that is if they are not tight enough, they won't seal at all. Applying tape reduces the friction of installing the threads, making it easier to get the joint tight enough to seal.
@mrblaine you seem to be a master of all threaded connections...can you validate or repudiate the above? I don't know if that is an old internet myth or factual.
I've also heard not to use tape on air line fittings, because it can come loose and get trapped in downstream fittings, manifolds, cylinders, etc. I believe that to be a rule some big corporation came up with to prevent lazy, careless, pipefitters (not that all pipefittters are careless and/or lazy) from screwing up expensive automation. That rule was taken as gospel and became something its not. I've applied a LOT of teflon tape to my own fittings and airtools, and never once have I found tape downstream or had a piece of tape get into any of my tools.
If you are messing with quality brass fittings, generally you can just screw them together with no lube or sealant and they will seal just fine.
The other big thing that will get you in trouble is the fact that they are tapered interference threads. If you lube them up and tighten them into something like a transfer case, the whole "lube to get them tighter" is more than capable of splitting the case.
It is very easy to get tape into some place it doesn't belong if you are careless and leave a tail hanging off the end of the fitting. It is easy for us who are not careless to wonder how stuff happens but I've been warned enough in certain industries like steering, hydraulics, and oil field plumbing to believe that not everyone is as careful as they should be.
If you want to learn some, start putting together your air tool quick disconnect fittings dry and then with tape. It is very surprising how little they leak at low tightening pressures with no tape.
When I am setting up a new brake kit, I use air to clamp the caliper onto the rotor to hold it in place so I can get dimensions for a bracket. That means I typically cobble together some sort of adapter line with a stupid amount of back and forth adapters. Generally that is just all threaded together by hand and the leakage in minimal to none.
On other stuff that I have watched my professional plumbing buddy do, he has several wraps of tape and paste to stop a leak.
One thing I also do a lot of with lots of success is to use Loctite Red on the NPT side of adapter stuff. It is a sealant and on a lot of AN fittings, the flare will lock down harder than the breakaway torque of the NPT side. Loctite in the NPT side and it doesn't leak and doesn't turn breaking the flare side loose.