I have used the blue for years and have never had a problem from using it. I don't see any real difference between the blue and the black. The black is packed in several gasket kit I have purchased in the past. My take is improper use is the problem not the product itself. I most likely used it on one of my Oliver 1850's when I replaced one of the carrier bearings. When the carrier bearing went out the big drive gear in you see in your picture cut a hole in the hydraulic oil pan. I am sure I would have used the blue on both gaskets that go between the casting, hydraulic oil pan and the top cover.
I always wonder if the people that have problems with the silicone gasket sealer apply mustard to their hot dogs in the same over abundance.
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