It has nothing to do with dry or cracked lips… I think you're, respectfully, missing the point. It's the act of rubbing something on your lips that is very sensual to (some, certainly not all) girls/women and gets them turned on, which is why they notice. Also, when your lips are glossy they look "more kissable" and inviting, that also get their attention.
Just make sure you don't do it if it's out of character so it doesn't seem like a tactic. You wont find Joe Jock spreading gloss over his lips for fear of being branded a fag by his buddies.
Many women/Girls get turned on when they touch their own lips or rub them, seeing someone rub their lips elicits that feeling within them. Kind of like when you're really hungry and you look at a big juicy steak you start to drool. Especially if that particular girl is a horn ball.
I used to have a strange habit of rubbing the smooth mouth of glass beer bottles along my bottom lip if I was distracted while drinking... if you watch body language carefully you'll sometimes... not always... see that "I’m getting excited" reaction coming for a girl.
If it fits your personality and isn't out of character go for it, if not scrap it.