brake fluid

However in a race car silicone is not ideal because it is more compressible, which translates to the pedal feeling less firm and possibly more 'mushy'.

The glycol brake fluids are actually intended to absorb moisture. The idea is the if regular maintenance is performed then the flushing of the fluid will remove the condensed moisture from the system. The typical problem crops up because that maintenance isn't so regular. I know better and I still don't do it as often as I should.
Correct, the silicone type will not absorb there for on low spots in the brake lines water may collect and corrode. Both have advantages and disadvantages one is not really better than the other.