Many years ago,I had a wet cable like that on my the Park cable (rear) of my '65 Newport. The plastic sheath was intact, but might have had small cracks. I sheathed it with tygon tubing and a hose clamp and it hasn't leaked there since (other leaks). My '65 Dart appears to have a similar repair. Can't recall which cable, but the sheath is degraded about the same spot as yours.
I don't recall any seal stops fluid from flowing into the cables, so I think if the sheath fails it will leak. If you do try a tape solution, try self-fusing RTV silicone tape. They use it on F-16's. I think it can handle ~700 F and once cleanly bonded it won't come apart. You can find in hardware stores, but it is expensive. Another idea is "Liquid Electical Tape". Other thoughts are butyl rubber caulk or polyurethane caulk. They are good for water, but not sure about oil.
