When a reel is specified to have a wood knob, I typically finish the wood with Tru-Oil. Then one reel came back to me with a tight knob. I know that it originally rotated freely; the wood must have shrunken.
So a more intensive treatment for wood knobs is in order. Here is my kit: wine bottle (empty), Vacu Vin, drilled blanks for knobs, and Minwax wood hardener.
Vacu Vin is a wine bottle stopper and vacuum pump. I do not know how much vacuum it creates, but it must be substantial or else it would not be effective in removing oxygen from a partial bottle.
Recipe: Put knob blanks into bottle, cover with Wood Hardener. Pump down the bottle until you hear the stopper click (much foam when air is pulled out of the wood). Let sit for 1/2 hour. Pour off the excess hardener, extract the blanks and let dry.
I envision that hardener is forced into the wood pores when the vacuum is released.
Update 2 June 2015: Having dealt with several knobs processed this way, I now feel that the stabilization is not adequate. So I am agreed with Terry, it is best to use plastic.