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Indeed, never use teflon on the fixings. You dont't need it, is basically wrong nd could be dangerous.
Yes, I use the described method and it works not only for me.
That the fluid returns to the reservoir meabs that something is wrong. Did you appply the 2 mm play between brake pedal and the MBC rod? No play also can cause unexpected reactions in the system. Check it. The brake fluid only returns after releasing the brake pedal, not when you press it.
Remember, with standard factory recommended parts and products, correctly installed and adjusted, your brake system can be better than a lot of modern cars.
If the pedal play is correct, I would check the MBC again. Take it apart to make sure you assembled everything in the correct way.
Otto
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