Locos with short sliders always have that problem. I run them a bit faster so momentum carries them out of the area where they lose contact. Also clean the middle contacts to remove any dirt that prevents contact and make adjustments to the slider which can easily be slightly askew or bent.

Graphite is conductive. I would be concerned about the powder getting in everything. I bought felt furniture pads which I cut slightly wider than the rails. The pad has a bit of flex and absorbs alcohol so the two rails and the pukos are cleaned at the same time. The felt is dense enough not to leave bits of it on the track.

They should work fine and sometimes need a bit of fine tuning. Assuming the tracks and wheelsets/sliders are clean and free of dirt or other contaminants and there are no issues with track power in general. When I was troubleshooting the issue I would get a small flashlight and a non-conductive pointer of sorts - a long toothpick or something similar. When it stalls, assuming you can get up close, use the toothpick to manipulate the slider or wheels until it starts moving again. This may give some indication to the issue, whether loco or turnout/crossing or both, and oftentimes the slider needed tweaking, or the spring needed tweaking, or both. I recently had this issue with a M track turnout, where the puko contacts where not at the appropriate height and it was fixed with a set of small needle-nosed pliers. Good luck.

Also incidentally this note came via Robert Frowenfeld of RJF trains on the new Marklin Shay yesterday - Marklin will start putting a buffer capacitor in new locos. This is something I want to do in my LGB locos to avoid the sound stalling issues.

With this locomotive, Marklin has started to install a "buffer capacitor" (some folks like to call it a "keep alive" circuit). Basically, this is a capacitor that, once it has had a chance to charge, acts as a battery to store power to keep your locomotive running for a brief period of time if it encounters a short section of track that doesn't have power (due to dirt, oxidation, etc.). You'll start noticing this feature in, among other places, the icons that Marklin includes in the descriptions of its models. I expect we'll see more of these in future models!