Saddle soap will turn what's left of the leather into a soft mess, so don't do that.
Jerry (LugerHolsterRepair) is our resident expert, and a quick search around the forum will find some of his earlier advice.
Welcome to the forum.
When properly assembled, parts will not have movement slop. The recoil spring will properly hold the cannon in place above the frame, receiver flush with the front of the frame. It's won't be loose.
You can assemble it improperly, especially where the recoil spring lever hooks and "S" shaped lever engage.
There are a large number of 102 year old lugers that are far from "retirement".
If you need help, you'll need to work with a gunsmith familiar with the Luger mechanism. There are not many of them. Members here that live near you may be willing to help, or you could contact "LugerDoc" in Missouri - an experienced Luger gunsmith.
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 Igitur si vis pacem, para bellum -
- Therefore if you want peace, prepare for war.
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