You have confused wood hardener with sealant. Wood hardener, like minwax, isn't meant to seal wood. It is meant to firm up soft, rotten wood so it can be worked.
Cut seal paste (which included beeswax preparation) is meant to shelter exposed wood lilving trees with the assumption it will act as a band aide for the tree. The stuff you removed probably wasn't grafting paste, but Kiyonal cut sealant. It's bonsai-specific product that is the consistency of tootpaste when applied. It can dry over the years into a gummy, mostly unremovable mess.
The use of cut seal is rather useless according to a lot of current hortcultural thinking and can even speed the rot of the wood it covers. I stopped using cut paste on trees a long time ago for minor pruning wounds. I use it now on large trunk chops to keep sap loss to a minimum in the first few weeks after.
Wood hardener used as a cut sealant is kind of useless. It doesn't really provide a waterproof seal, and isn't meant to. It also isn't a wood preservative. It will firm up punky deadwood so it can be carved, but it won't prevent much protection from rot.
The best way to get past this stage of exposed wood is to allow the tree's leader to grow for a few years and produce callus tissue to cover it. That's the way
