It will, however, affect the way the fastener holds. The teflon will prevent leaks in liquid piping systems, by virtue of taking up the space between the threaded elements. It's what it was designed to do. If you want a product that will prevent threaded fasteners from loosening, you really need something else. The Loctite blue is designed to prevent threads from unintentional loosening due to vibration, rotation, etc. It also takes up any space between thread elements, thereby also serving a secondary purpose of sealing out dirt and water, albeit not to as great a degree as the purpose designed sealing agents, such as 567 or permatex #2.