https://www.fmcsa.dot.gov/rules-regulations/administration/fmcsr/fmcsrruletext.asp?section=571.116
I've seen the "gelatin" you refer to ... but since by definition it is not in any place that fluid actually moves, and it's not actually sticky (when coated with DOT 5) nor solid, it doesn't seem to be a problem. And it's no worse IMO than what happens when running pure DOT 3/4 (eg the brown goop that Dale reported).
I converted a 1980 Chevy to silicone back in 1988 or so, by replacing the one caliper that was leaking and just bleeding DOT 5 through the rest of the system. When I finally junked the car in 2003, I had never touched the hydraulics again ! That means 3 corners plus the MC had an estimated 250,000 miles total on them, mostly with DOT 5, and never a single leak. And that's after reaching the end of a 'normal' life on DOT 3 !
I've done several other conversions the same way, with similar results. On the motorhome (where I could not find a rebuilt caliper or seals to rebuild mine), the silicone actually stopped the leak ! I eventually found the seals ... which are still on the shelf in my garage.
I live near mountains and love to drive my Triumphs very hard ... brake fade is no stranger to me. If there was any way that mixing DOT 5 and DOT 3 was inferior to DOT 3 alone, I probably wouldn't be here to tell you about it.
The papers presented to the SAE talking about things like DOT 3/4 sucking water and salt directly through brake lines; and having to develop new testing methods to test DOT 5 to failure; are too big to post here. PM me if you'd like a copy (about 1.2Mb total).
The point about OEMs not using DOT 5 is well taken. Even after the US armed forces and post office insisted on it, car makers still don't want to spend the extra money on each car for something that has no direct benefit to them. If you follow their directions on changing brake fluid every few years (rarely mentioned in ads, but usually found in the fine print of the service manual), then the brakes will last beyond the warranty period. And that's really all they care about.
It's also true that DOT 5 is very slightly more compressible than DOT 3/4. Nelson Riedel did a whole lot of math on this topic, and found that it amounted to considerably less than 1/2" at the pedal under anything approaching normal conditions. He then took some actual measurements, showing he could achieve 1/4" more travel by applying the maximum effort possible (with the engine running). Not enough to worry about, IMO. If it does worry you, you can more than compensate by converting to Teflon/SS flexible brake lines.
I have no problem with those who choose to use DOT 4 in their LBCs. But I've used DOT 5 for many years now, and have not found anything not to like about it (except price and availability). IMO, it's just not as bad as all the "nay sayers" would have you believe.
Almost as evil as dihydrogen monoxide ... did you know that 100% of the convicted killers in the US were exposed as children to dihydrogen monoxide ?
:^)
Randall