Seen the tape over hang break loose, and get circulated around the system, and eventually create a clog in the radiator restricting flow.
If installed/wrapped correctly, you "could use it" its not rocket science to use tape, but for my assemblies, and builds, I use what I know for sure works, cause I don't like repeat customers for something I did or did not prevent.
With paste...seems like it would be more prone to breaking off in a chunk, and doing the same as far as creating a clog, but I have yet to see this on any engines I have ever built, or worked on.
Thread seal tape - Wikipedia, the free encyclopedia
~F~