Randy,
The Lustrox was essentially a fine pumice powder in a white paste. The paste made the stuff easier to use when daubing it into the intake of a running engine.
Pumice is abrasive, but very soft. It crumbles down to very small as it works under pressure. So, Lustrox treatments were self-limiting in a way. With abrasive grits, there's always a risk of the grit embedding in the softer metal and continuing to cut the harder metal. ... that's just like the paper backing on sandpaper isn't capable of cutting wood, but the grit bonded to it is ...
With pumice, the risk is much less, as it will crumble down fine enough that it does not project through any oil film between the parts. Or, if it does, the affected individual grits will crumble down still further until they no longer reach the 'other' piece.
However, totally agree that this approach is not a good idea with the tapered modern precision machining. It may cut away the calculated hot fits before it crumbles out of the way...
It was a decent method with parallel-cut iron and steel piston/cylinder parts, particularly when the pieces in an individual engine were on the excessively tight side. That happened occasionally with Fox engines... Lustrox simplified break-in, and spared wear on parts that a too-tight top end stresses too much.
When I lap-in a iron/steel set, I make a thin paste of Lava bar soap grit (again, pumice) and "reduce" grit size between two pieces of flat glass before it hits the engine. You can feel it cut, at first, then fade to no cutting at all... Depending on fit and feel, it may take several cycles of that, with thorough cleaning in between...