Moly coating was developed by the late Roger Johnston at NECO in the late 1980s or early 1990s, IIRC. It works, actually, to reduce friction and throat wear and metal fouling. Norma still sells its Diamond line of ammunition loaded with moly-coated bullets and their site has photos of 6.5×55 sectioned barrels to show the effect and a nice 100-round group fired from a barrel with 10,000 rounds of moly-coated bullets through it.
The problem is that NECO's system used expensive lab-grade acid-neutralized moly and impact plating and a carnauba wax final coating in their system. When the moly "craze" got going, all kinds of cheaper grades of moly suddenly hit the market with everything from spray-on to cheap technical grade moly with free sulfur still in it and grades too coarse for the purpose. So, suddenly you got reports of moly building up lumps in barrels and rust and corrosion being initiated by it (because the free sulfur reacting with water to form acid radicals) and folks would just assume a problem they had with cheap moly applied to all moly and the reputation of the practice took a tumble.
Here's my experience with it: My first military match rifle was a Garand I bought through the now-defunct DCM program and accurized using the original barrel. When I first completed the accurizing work, shooting prone with a sling at slow fire pace, I put 10 rounds (47.5 grains of 4064 and 168-grain SMK's at 3.290" COL) into 0.7 moa with it at a 100-yard range. So it could shoot well when it was tight. But it's barrel was so rough and accumulated copper fouling so fast that its accuracy plummeted at about 40 rounds so it couldn't even stay in the 9-ring. If you've shot any Service Rifle Highpower, you realize that means it was coming apart in the slow fire phase of the 50-round National Match Course and was already in trouble before getting to SF in an 80-round match. It would take most of the night to get all the copper out with Sweet's (this was before Bore Tech or the other chelating cleaners were available). It was slow work and my sinuses were sure clear at the end.
Then I read about moly-coating. I got the NECO materials and it was like a miracle in that gun. I could shoot an 80-round match plus sighters and have no accuracy issues at all. The copper took much longer to build up. Further, there seemed to be less shift between cold barrel and warm barrel POI, or, at least, it was more gradual and no more trouble to correct for than slight shifts in the wind. So I was pretty happy with things at that point. I did have to up my loads by half a grain of powder to stay in the happy place. Reducing bore friction reduces start pressure, so the bullet sees peak pressure with a little more volume behind it, losing a little velocity.
These days there are other coatings. David Tubb sells hex boron nitride, which is even slicker than moly and doesn't color the bullets or your fingers don't get visibly smudged using it. Harold Vaughn found that most of the benefit of moly could be had by putting a little of it in the powder instead of on the bullet. Tubb now sells a specialized blend of hBN for that called Tubb Dust. You add about 11 grains to a pound of powder and as soon as the bore gets coated, copper fouling is greatly reduced. It's like having your own anti-copper fouling additive.
Since I bought into the NECO system long ago, I still use it. Sierra and Norma moly-bullets are coated by the same process, so I've bought them before, too. I recently got some of the Tubb Dust to try, though I haven't rung it out yet. I am thinking to go that route for as-issued Garand matches, for which I don't want the ammo looking any different from Military (no black bullets). But I also will be using it with a Criterion barrel that doesn't tend to foul badly in the first place, so it's kind of a no-clean luxury there.
Another approach is treating a bore directly. Sprinco has a product called Plate+ Silver that you can apply to the bore of a rifle for 72 hours and it makes a coating that reduces velocity the same amount as coating bullets does, indicating it has the same effect. A coating lasts about 1000 rounds, but you can refresh it periodically before you get there. Shooter's Solutions has a metal conversion coating product called Moly-Fusion that will also coat a bore and prevent copper fouling. I don't know how many rounds it lasts. So, there are numerous options out there that work to achieve pretty much the same thing.