I am not sure if you are referring to using ATF to clean and lube the cylinders or the practice if using a high viscosity oil to coat the rotating parts. That works really well in a plain bearing application. If your friend was a Vic Pickens disciple he was probably fond of spinning those engines over a long time before letting them start
Using it as an entire assembly lube. Bearings and all.
He used to pressureize the oil galleys and crank the motors with an electric motor and belt.
As kids we would sit at the end of his driveway and when the motor kicked over it would blow our hats off. We loved it.
He had a bad ass ford falcon wagon that was hi daily driver. Glass packs and a whistler under the hood. Car was fricken cool!