Its a zinc compound used in motor oil to prevent metal to metal contact. IE a form of Extreme Pressure lube.
You are only partially correct. It is an extreme pressure lubricant. It is not a zinc compound, but it does contain a zinc additive and also modifies the film strength of motor oil. STP was developed for use in highly modified engines that had high lift cams and heavy valve spring pressures. Older motor oils once contained the zinc compound, but it has been omitted in modern oils. The reason is that auto manufacturers went to roller cams, which all modern cars have, that greatly reduced the torsional friction of those related parts and it is no longer required. Thus the zinc additive was no longer required. Shortly thereafter, flat tappet vehicles started experiencing early camshaft and lifter failures and additives were developed for these cars. When I tore into my 80 Pontiac, it had 5 worn lobes. I have to use a can of STP with every oil change now.
Anyway, using STP on an existing breechplug will probably result in turning it past the index mark when re-installing it unless great care is taken. While it's probably OK to use when initially installing a breechplug, it's not an anti-seize and should not be used as such. You could end up with a loose breechplug.