The definitive study on this says don't do it because the sealer interferes with and slows the tree healing itself. However, the study's structure leaves a great deal to be desired and was essentially making small holes in larger trees and observing the results. This was more of lumbering tree study, IMHO. As such, it's useless to us, IMHO. I have a lot of gardening experience and wounds vary widely, to put it mildly, and species are very different, too. Big wounds on Acer and Prunus and Malus tend to attract insects that like their tasty sap (I speculate). When wood dries out the core of the branch removed shrinks, and if it has any size splits in the center making a nice portal into the the heartwood of the tree. Bugs notice this. Fungi are ubiquitous and if the wind presents them to an open wound they have a nice place to also find their way into the inner parts of the tree. I suppose if you have a towering tree and a little hole making a little blemish doesn't make any difference to you, who cares?
I don't have any trees that I want any blemishes on, period. I use standard tar dressing in my landscape and it works fine because the black blends in well over time and it does the trick, -usually. In bonsai, I use every kind of wound dressing in the book. If it's going to very visible and I don't think I can remove it from the core of the wood and the bark is thick and sturdy where an application doesn't have to get the sealer on the class A side of the bark (where the wound can be entirely sealed by coating the open end (edges)) of the bark, I use a clear liquid like Elmer's wood glue. I also use the Japanese stuff in the yellow tube with no English on the label where the bark is too thin and soft and will peel back and open up instead of laying flat. It's ugly no matter what color you use, but if you gob it on in a big enough blob it will have enough integrity to be peeled off in a few months. If too thinly applied little bits will adhere to the core and be impossible to clean out. I always overlap the edge of the wound a lot to make sure the live edges of the remaining bark are encapsulated and sealed so the bark (I speculate) more easily grows over the wound underneath the glob. My own success varies more than I like, but I think that's more species-dependent and not under my control.
Whatever else is true, I make sure the drying out of the branch core is slow (because it is in a wet place, longer), and contained, and as bug and fungi non-accessible as I can make it, and I leave as little to nature as possible. Right, wrong, or indifferent, that's my philosophy.
