Teflon tape will not dissolve and should seal the plug, unless there is a larger issue with the plug itself or it's not seating correctly. It could also be, you just don't have the plug tight enough. Secondarily, you did use the correct port on the master?
As for Telfon itself, because of its chemical makeup, it is one of the most non-reactive substances known to man. Wikipedia has a great article on it, but basically, for Polytetrafluoroethylene (PTFE - the chemical name of the Dupont trademark Teflon) the only chemicals known to affect it are reactive metals like alkali metals. There is nothing like it in brake fluid or the metals in the master or plug (I know this because if there were, our human skin would not stand up to it either). According to the Wiki article, Teflon maintains high strength, toughness and self-lubrication at low temperatures down to 5 K (−268.15 °C; −450.67 °F), and good flexibility at temperatures above 194 K (−79 °C; −110 °F). I'm not sure where people get the idea it will be dissolved by any fluid in an automobile or pretty much anything we have around the house.