The topic at hand is a Silver Swallow that has a screw in liner and the need to do two separate and different things here, (the back plate I couldn't care less about as it can be sealed any way you like since it is not a stressed component.)
1. The need to seal that screw down liner to the crankcase and,
2. The need to ensure the correct final rotation of the liner once it is locked and screwed down.
As to point 1 a gasket or glue seal only need fill the scratches between the two mating surfaces in order to be perfectly viable and no compressibility in its final state is needed, or indeed desired with anything that screws, locks down and is constantly being thumped upon by a piston.
Point 2 relates to a spacer, and a relatively accurate one is needed to ensure the engine is assembled correctly.
Again, I don't see how something as inaccurate as paper will ever fulfill both of those tasks properly. And Idon't see how flexible glue acting, as both seal and spacer will either.
You are in effect torqueing a head down onto a block, and whilst you may get away with some flexibility when using a slip in liner like those found on a series 13 Taipan (and yes I did have one of those once) and the amount of slip can be accommodated by the sliding fit of the liner into the case, it would disastrous with a screw in one that needs to be locked down by a threaded fixing.
An annealed spacer is one that could deform and will possibly allow movement so I still think that it needs to be made of a metal that is similar in nature to the engine case it mates up to in order to cut down creep, and doubly so when the intended use is with an engine that is an often dismantled test bed.