More important than sealant is the quality of your gasket. Many gasket kits use poor quality material and bad patterns. Factory gaskets are best, Vesrah, Doremi, and few others make good gaskets for the KZ's. Athena is not so good IMO.
So from my experience as a mechanic this is what I take away from the Sealant debate..
RTV - red, blue, black, its all WAY over used and most of the time is not correct. Use for thermostat and water pump housings that's about it. NEVER use on oil pans or automatic transmission pans. Excess squeezed into the inside will break off in time a plug up oil passages. Bad for the owners that tried to fix something, great for me who got paid to take it back apart again.
Ultra Black- Much better stuff and good to use when a sealant AND a gasket are used. Needed when you have a stamped steel cover to provide some compliance, stamped covers can bend a bit when tightened up. Great for valve covers, timing chain covers etc. Still WAY overused IMO.
Hi-Tach - Black tar like stuff for bonding thick cork gaskets to stamped metal valve covers and oil pans. Used to glue one side of the gasket to the cover so it comes off in one piece for service. Used on cars with mechanical valve trains that need frequent adjustment. Old MG's, Jaguar inline 6's etc.
Permatex #2 - This is the good stuff, a non hardening oil AND fuel resistant sealant, fantastic for use with complicated gasket schemes like the intake manifold on a cast iron block with aluminum heads, Kawasaki cam plug ends, rubber gasket inserts, and things like that.
Three bond, Honda bond, Yama bond - Non hardening sealant sets up much firmer than Permatex #2. For use without a gasket to seal precision machined surfaces together like case halves. Fantastic stuff and its all the same regardless of the name on the tube.
A Kawasaki oil pan is a strong aluminum casting with a machined surface. The case surface is also machined. NO sealant at all is required there. a good quality gasket a carefully prepped surface is all you need to prevent leaks. If you have damaged the mating surface removing the gasket you can use a small amount of #2 in that are to prevent a leak. You can also use small dabs of a non-hardening sealant to help hold the gasket in place during assembly.
If I knew what I was doing all the time life wouldn't be any fun.
'80 KZ650 E 700cc, dyna ignition and coils, frame up restoration, daily driver
'81 KZ1300 A3 full restoration, custom big bore pistons, 1400cc 6 cylinder super bike
"77 KZ650 B1 - Barn Find, work in progeress
"74 Yamaha DT 400 Enduro