The dowel was a bit thinner than 3/4
A few years ago, I was installing some balusters that the customer had picked up from a salvage yard for his stairway. I went to my local lumber supplier and bought some 3/4″ dowels to insert into the bottom of each baluster so we could glue them into holes in the stair treads. When I drilled a 3/4″ hole in the bottom of one of the balusters with my paddle-bit, the dowel fit was sloppy at best. Both dowels were definitely a bit narrower than 3/4″. My next size bit was 11/16″ and that was too small. So I clamped my 3/4″ paddle bit in a vise and filed each side of the bit, then tried some test holes.
Photo 1. Draw a template of the original bit on a flat surface. Make a center line and carefully mark the width of the original bit. You can then check the bit size as you file it to make sure you've removed the same amount from each side.
After a few tries and being careful to file the same amount off each side of the bit, the bit gave me a perfectly sized hole for a snug dowel fit. You can also file the sides of the paddle bits with the sharply pointed side cutters using the same method. Here’s another twist on the same idea: While fitting a hole for a tapered tenoned handle for a wooden mallet that I made on the lathe, I ground a paddle bit to a taper and drilled the bottom of the mallet head to accept the handle. It worked perfectly.
Photo 2. Clamp the bit firmly in a vise and file the side of each paddle the same amount with a medium file. Count the strokes as a guide for each side and then check it with your template. Drill test holes to make sure your dowel or tenon fits snug.