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Yes, now that you mention it, dad mentioned something about blisters. And he recalled it being blo, but he may have been mistaken. He used BLO on the double bit he treated when I was young.
Hickory doesn't absorb water very well let alone oil.
I still say this is an ol' "husbands tale".
The best way to preserve wood is to seal it on the outside, not the inside with oil. IF you successfully somehow got oil all though all the fibers of the handle you would still to seal it on the outside.