From what I've read, you're working on the wrong portion of the hose bibb. If it isn't leaking, then the washer and seat are good. If it isn't leaking around the stem, then the stem packing is good. The vacuum breaker can fail to seal when pressurized, which is what this sounds like-so that is what you need to disassemble-and it can be serviced any time the bibb is turned off.
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