The crystalline structure of graphite is bad for motor oil. It's like a plate. The plate "top and bottom" sides are good, smooth surfaces. The bad part is the edges which are relatively sharp or coarse. Not good, which is likely one of the reasons it was dropped.
Molybdenum is similar, but doesn't have that problem, making it better for engines.
I'm sure the black color freaked some out. I used it in my 69 Z/28 until my father told me why I shouldn't. He's a world renowned geophysicist, so I took him at his word. He specialized in high-pressre, high-temperature geochemical research. I still thought it was cool though. But a bugger to get off of your hands and concrete.