Well, not on my guitars. It is like a stain, in that it just soaks in so far.
Over time, my hand could wear down the guitar neck to expose new wood, but I'd be adding my own body's oil as it wore. I'd have to be playing alot, professional level for years for that to happen.
I just did the process in the last month, and I used a t-shirt to rub the dried Tung oil off the exposed tang. The Tung oil stayed in/on the wood.
I like it, it brings out the colors of the wood, and you can keep doing layers. I've also taken an Old Hickory knife and dunked it in a container of Tung Oil, overnight. This let it soak in much deeper. It added weight to the handle for sure. The end result, I hope, is that the dried out wood will not continue to crack. It was a loose handle, but not now.
Time will tell about the Old Hickory experiment, but I know that I like what it did to my guitars wood. I got the idea from experienced luthiers.
Others might chime in here and tell me that there is going to be a chemical reaction between the Tung oil and the stabilizers in the wood. I hope not, but my gut says no.
I plan on getting dirt, blood, and sweat on the same handle.