Where did you get this information?
From that article "How To Survive A Nuclear Attack". They also recommended Betadine as another source of iodine to smear on the inside of the upper arm. I suppose if that was all one had at a time of emergency, and they didn't choose to order potassium iodide pills, the liquid iodine sources for topical use would beat using nothing. Either thing would still not eliminate the necessity of staying indoors in any event.
We have set up a concrete storm cellar as a fallout shelter (as shown in the referenced article). So, we wouldn't hesitate to use it for that purpose as well as for a shelter in the event of a tornado warning.