The crud looks like seaweed. Did you take it scuba diving with you?
The problem with most teflon tape is it should never be wrapped over the first 3 starter threads when installing any threaded fittings otherwise it can find its way into places where it can cause the above problem
A retired Duck was my instructor for a two year HVAC/R class I took back in the early 80s. He use to always say Teflon is a lubricant , not a sealant. I was a Jarhead attached to the Navy for security work. We got along fine. He preferred thread sealant over Teflon tape or paste.
We use Rector Seal on the Rail Road on all of our train lines and ground air line joints. Good stuff.