The cactus will heal just fine without grafting the tip of the cutting back on. It will simply callous over and eventually form a new pup and continue growing from that.
If your going to graft the tip back on, I wouldn't rub the open wound with anything like that. I am familiar with the thread you are talking about, and I'm sure there is a reason that the shaman does this, but there really is no reason to do so when looking at it from a horticultural view point. Doing this can promote mold and disease to set in before the cut heals. The reason the shaman does this is purely a spiritual reason, saying that the cacti spirits like tobacco so it helps them heal.
If you want to give it a shot, go for it. But be prepared to possibly have to cut more off if it starts to mold or rot. As far as grafting goes though I don't know if you can simply just place the tip back on the top of the cut, or if there is anything else that needs to be done as I have never done a graft myself. I have not had my cactus long enough to take cuttings and try grafting yet. This upcoming season will be the first season I take any cuttings. I'll be taking three, one from the main stem, and cutting both arms off and planting all of these to get my garden really going.
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