it's not the tension on the set-screw as the wear is on the inside shoulder of the lip and the side of the set-screw. When you tighten the tailstock, the set-screw bears against the lib on the handwheel, that is where all the wear is taking place.
I'm going to try making a set-screw out of Delrin tonight and see if that slows it down till I can have a new handwheel made. Sad as it's the only part of the lathe that's disappointing.