Those were the instructions that used to come in the kits which included a small plastic packet of the stuff.
I fell into this trap (trick of thinking if its good for A it must be good for B) until seeing this.
View attachment 1716454461
(That's a connector for a replacement F*rd Duraspark on my AMC Jeep)
Clearly not moisture resisting!
Here's the bulkhead connector on the some vehicle. It was filled by the factory with a dark brown
moisture resisting grease. Terminals all look pretty good.
View attachment 1716454462
Posted these photos before but thought its worth reposting here.
Here's how I'd summarize it.
The dielectric grease is for resisting high voltage. If not used, the possible issue is carbon track.
The other components the main issue we're trying to head off is corrosion. Use moisture resisting grease to for this job. Insulation to prevent shorts should be provided by the connector and the wire support.