When installing tank fittings it is critically important that you don't get any teflon tape or pipe dope residue into the tank. If you look close you'll see that I have wiped on the thread sealant and then cleaned the first two threads. Doing this prevents getting pipe dope into the fuel tank.
Teflon tape is verboten in fuel systems. I suspect this advisory from Racor and others is more for the common denominator factor than anything else. I suspect it could very well be used, if applied, correctly, but I still don't use it in fuel systems, just dope.