As their name suggests, Japanese water stones generally require a touch of water to produce the slurry that provides the abrasive to sharpen.
If the steel was still wet (with water), then the oiling would not have made contact with the steel that still had a layer of water on it (remember oil will float on water).
I would think that if you had dried the steel after sharpening then oiled it, you would not have had this occur as the oil would have been able to coat the steel and prevented the corrosion shown in the pic.
Just my thoughts, although I could be wrong.
Kind regards
Mick