It is designed for halftone results, so it must be seriously tamed in contrast for continuous tone results. The good news is that it is pretty easy to do. I would not recommend diluted Dektol or any other paper developer. The contrast is still too high and the midtones that are achieved can look reminiscent of halftone dots, as opposed to true middle densities. It can also be difficult to get repeatable results. You are better off with highly dilute one shot film developers, or specially made brews. Your best option IMO is Soemarko's LC-1, which is a home brew. You'll need metol, hydroquinone, sodium sulfite, and sodium bisulfite (A.K.A. sodium disulfite sometimes) to make it.
It can tend to suffer from pinholes. My guess is that since it is designed as a halftone film, the quality standards do not need to be as high as film designed for making silver prints. One can easily touch up a piece of halftone film, since one does not need any middle tones, but only needs either zero density or maximum density on the film; all you need to touch up a halftone is a Deco Color paint marker or some rubylith tape (and occasionally some bleach if there are any pepper spots – black where there should be clear).
On a positive note, I only really see the pinholes with halftone and paper developers, and not with Soemarko's LC-1. I might also suggest presoaking for several minutes, skipping the stop bath, and using an alkaline fixer. Also, remember that these are films, not papers. They eat through your chemicals quickly, so you should monitor your fixer closely in a printing session. I usually have to change my fixer several times if I am spending a few hours in the darkroom working with litho film. All your chemicals will turn much darker than they do with photo paper or camera film. The fixer, particularly, will turn dark yellow or orange. Don't worry about it. Just do the standard fixer tests religiously throughout your session (double or triple the clearing time of a test scrap of unexposed film, and discard fixer when clearing time reaches twice the original clearing time).
Midtones on litho negs will often look yellow or brown. With LC-1 in particular, the whole neg ends up looking dingy. Don't worry about it. They will print fine. I have assumed it is the result of the incomplete development that we purposefully do to pull continuous tone from these films. Even with A+B halftone developer, an underexposed piece of film can have traces of yellow or brown in the least dense areas.
It works fine in pinholes, and it is cheap. Make sure you order the 3.9 by 4.9, and not the 4x5, size if you are using 4x5 film holders. This size is made specifically for loading into 4x5 cameras.
I don't know about reciprocity, but I have had great results from it in pinholes. It is slow, so it is easiest to use when there is lots of light.