Why do we use lube on yoyos that we can adjust the gap? (Loop 900, unleashed…)
To make it quiter?

To adjust how it plays. As well as too maintain the bearing. Mostly just adjusting how it plays though.

for looping yoyos thick lube is used to make/keep it a good amount of responsiveness

but we can adjust it.

Adjust it further.

Pretty much like everyone else is saying. Lube adjusts the bearings “feel”. It also helps to keep the bearing from chewing itself up with metal on metal.