If any wheel, stock or conversion, is binding when you tighten the spindle, the bearings are binding due to the outer bearing races not being seated properly in the hub, or missing or incorrect spacer for the inner races, or missing outside spacers.
Basically, when you tighten the spindle, the "compressive force" should be transmitted like this: Spindle nut-swing arm-dust cover/spacer-inner race-spacer sleeve-inner race-dust cover/spacer-swing arm-spindle head.
ALL of these need to be in positive contact with each other, any clearance, and a bearing will bind.
Once, I experienced a binding rear wheel on my Ducati M600, but all parts were installed. The outside spacer on the lefthand side is flat on one side and beveled on the other side. I had put the beveled side outwards, it is supposed to face inwards, and only make contact with the inner race of the bearing.
In any case, a wheel spindle should always be tightened to manufacturers spec. So find the issue instead of "backing off" the nut!