I use it to coat the nail knots that I use to secure braided loops on shooting heads and shooting lines, or to splice line. These knots may go through the guides hundreds of times during a long day of fishing. I rarely need to redo the UV Knotsense coating. I think this is much more abuse that a fly will take. When I have seen it come off a fly it has been for one of two reasons: either the material that the knot sense is affixed to come loose, or it was used to make a large head on a fly in place of epoxy and it cracked after striking a rock, boat rail, outboard engine cover, etc.
The stuff is very durable and will likely outlast the other components of the fly.
No idea about the thinning. Probably time to buy more.
Personally I don’t like this stuff much. I too use it to cover knots like tailing, and the line will always fatigue behind the coating faster than otherwise, although it does help shooting the knot, so it is a trade off.
Have used it for wing-cases and it was not nearly as durable as epoxy. Have heard that the latest batch does better so I’ve been meaning to try it again.
BTW, their wader patch is great stuff for an emergency patch as long as you don’t mind voiding your warranty.