Oil or water work just fine for me, and I think I read somewhere that acidic ingredients interfere with smoke absorption, and mustard is acidic. However, you don't taste the mustard anyway.
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On my last competition I decided to just use water. It worked out great. I would add rub then sprits with water, add rub more sprits. I did this until I got the amount of rub on it I wanted. It could be a coincidence but I won first place.
Mustard used as a binder has such a minimal amount of contribution to flavor you will never notice it on ribs or butts. That said, you are better with water or olive oil.
I advise you to read (or re-read) Meathead 's write up on the science of rubs. He discusses this very topic in depth.
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