The correct installation technique for a close nipple is to apply thread sealant and then thread the nipple into both fittings by hand by 2 or more turn before tightening using wrenches on the fittings, never on the nipple. The question does seem to understand that using a wrench on a nipple could be wrong, which is an understatement.
in re: "nipples with no plain pipe segment are bad/prohibited" etc. This nonsense is for the convenience of know-nothing inspectors, and doesn't actually prevent the danger it seeks to ameliorate. All nipples, pipe, and fittings except for the type called "rigid conduit" which is for electrical use only, are threaded with a "tapered" thread. The threads are conically tapered for a cone-in-cone wedge fit that becomes progressively tighter. There is no danger of one side sinking into the fitting and the other side remaining with just a couple of turns of engagement. It requires only minimal competence to distinguish between a connection make with a tapered thread and a connection made with a non-tapered aka "running" thread. The expectation that inspectors and workmen are unable to distinguish between the says as much as needs to be said.
[NB: rigid electrical conduit look like schedule 40 galvanized iron (actually its been steel for more than a century) pipe and fittings may be made using a non-tapered thread. electrical conduit joints aren't required to seal against pressure, and generally don't.]
Thread sealant generally mean using a good "pipe dope" e.g. Rectorseal No 5. Teflon tape is less messy to use but much more likely to produce a leaky joint. The tape must remain in place well enough to undergo "plastic flow" deforming itself to fill the non-conforming parts of the joint. It always shreds and stays at the leading edge of the pipe to some extent. Never use Teflon tape for fuel oil lines, the shredicles can (will) plug up the fuel oil pump and nozzle strainer. Specialty thread sealant products for specific fluids like liquid fuels and refrigerants often also seal water and natural gas, (see product labeling) . Their use is uncommon because of their high cost. Be certain the product is safety agency listed for the intended use when applicable.