I use the teflon liner tube and use electric motor bearing grease on the flex shaft. I work the grease into the flex shaft and leave a thin film of grease on the outside surface of the flex shaft. I found this to work without failure or little restriction. After running the boat for a few hours the same day it was still good and I could free spin the prop cuz I am clutched with very little restriction. At the end of the day I remove the flex shaft and get the water and remaining grease off of it, spray WD-40 on it like a rinse, then hang it. The teflon tube I leave in, other than being greasy on the inside it is in very good condition with no wear at the curved point, which where it it will wear through first. At the first sign of wear I replace it.
I haven't tried without the liner cuz I didn't want any radio interferance from the metel to metal contact. But with todays electronics I believe it not an issue anymore.