A couple years ago when i bought my first rx7 i remember seeing orange silicone squished out the sides where the rotor housing met the plates, the guy said the engine had a 20,000 mile rebuild and it was street ported, the thing ran well so i am curious because i have never seen silicone like that on a rebuild?

 

he probably used the silicone to hold in the water seals.

I dont know of any problem with using silicone, just dont use too much