s6-tai64n acts as a filter, reading from stdin and writing to stdout. It prepends lines with a TAI64N timestamp and a space.
s6-tai64n does neither "line buffering" nor "block buffering". It does optimal buffering, i.e. it flushes its output buffer every time it risks blocking on input. Every filter should behave this way, whether its output is a tty or not: it's simpler and more efficient in every case.