Stu, to the best of MY understanding, the grease can be applied before you make the connection. I stand to be corrected here by the electrical engineers, but like said before, I've seen it ALL globbed up in light bases for the obvious corrosion limiting properties. I myself use it commonly on battery terminals in vehicles, heavy machinery, boats, etc. Years later, the terminal will look like the day I put it together.
If I had to make an offhand guess here, I would say it has to do with oxygen/element exposures, thereby preventing corrosion.
I learned this trick many years ago when I had some "dealings" with the U-Haul Co. Smart people. They went to mounds of trouble to prevent minor mishaps on many different levels. They would take pieces of burlap about 2" X 4" and cut a hole close to one end large enough to go over a battery stud/terminal. Slathered in dielectric grease. After the connection was made, the remaining flap was folded back over the entire terminal, and the grease would hold it there. It was kind of an icky mess, but the results were, it was VERY rare to have to remedy a terminal. I still do this today with the aforementioned results. And I use teflon grease too by the way. It's a LOT less nastier than marine grease, and I'm thinking that it shares some of the same dielectric properties. I have never once been let down by this stuff.