Hello Charlie,
The black coating is not an iron oxide but is selenium (tin) based. The coating thickness is cosmetic and only molecules thick, it's not very hard.
I doubt it will make any difference if you get some of the black inside the cylinders, it will quickly wear off when the engine runs.
To be on the safe side, I pressed two rubber corks into either end of each cylinder, when I black coated the cylinders for by Bristol Mercury radial engine. It worked perfectly and completely masked the cylinder bore.
Mike