Mitch, you will find that whereas Robin, who never uses tab, representsone extreme, the other is people who can only play when the tab is right in front of them. And there are a lot of dulcimer players like that. Obviously, whatever way of learning a tune works for someone is the right way for them, but I do think there is an over-reliance on tablature in the dulcimer community.
You are right to think of the tab as a fake book, and most of us use tab to get the basic idea of a song but then we rely on our ears and eyes to modify or embellish the tab and make it our own. However, there are other uses of tab that center not merely on the bare bones, but the embellished version itself. Stephen Seifert, for example, has indeed published his Join the Jam series which is like a fake book, but he has also put out his DVD lessons and other material where he has painstakingly created tab for his improvisational work. That use of tab is aimed at helping us find our own ways to embellish the basic songs. And some tab is intended to demonstrate arrangement possibilities. I bought a book of tab from Nina Zanetti in my efforts to learn to play fingerstyle dulcimer. The tab is helpful not to learn the melody, but to learn how to add notes around the melody in order to create a song that moves in a steady rhythm without strumming chords and still expresses and expands upon the melody.
I have used tab in the past and I still do, almost every day that I play. But I never rely on it and I need to have a song "in my head" in order to learn it. Personally, and perhaps this comes from having played the guitar for years, I begin by trying to understand the structure of a song. Is it in AABB form or perhaps ABAB? What are the chord progressions of each section? Once I know that the song has, for example, an 8-measure A part in D major which is repeated and an 8-measure B part that begins in Bm but resolves back to D major, then I begin to work on the melody. I might consult the tab (or SMN) to get a sense of that basic structure or perhaps to help with some difficult parts of the tune. But for me personally, I have to hear the song in order to make use of the tab, and I end up learning more by listening than by looking at tab.
And once I learn a song, I never refer to tab again and take pleasure in the fact that my playing strays further from the tab as I play the song, hopefully creating a version that is really mine and not the creation of whoever wrote that tab that helped me in the beginning.