"No chance of mixing oil with water?"
Not and have any good combined properties.
I have heard of chaps trying a quench tank with a foot of oil on top of a foot of water. They supposed that it would cool down in steps. The problem is the steps are backward.
The reason that oil and water don't mix is due to a lot of head numbing chemistry and physics, but short answer is that they just don't match up with each other.
During those old experiments I did, I was mainly trying to get the oil into a form that was soluble in water. At one point, we bought a surplus homogenizer from the dairy industry, and ran the oil/water/other chemicals through the machine. What that did was push the mixture through a small hole in the end of a sapphire nozzle. Up against the nozzle was a plate with a flat sapphire surface. This was forced against the nozzle with a huge screw shaft, creating extreme pressure as the liquid passed through in a one molecule thick film. The oil and water would get so completely mixed together that they would not separate when the liquid came out of the discharge tube. This mixture was water soluble to some degree, but lost some of the properties of water and of oil. It also came out very slowly, and that was not going to work for making tens of thousands of gallons of the defoamer.
The quenching properties of water are adjusted by changing the density and boiling point...or by polymerizing it. Adding alcohol lowers the freezing point, adding salt raises it.
The new commercial water based quenchants are polymer compounds. I haven't used them, but plan to experiment next year and see how they work with the knife quenching process. Just because it is great for cooling down car axles doesn't mean it will work for 4 ounce fillet blades.
Oil is easier to adjust, as more there are many types of oil. By mixing oils of different properties, along with wetting agents and surfactants , the manufacturer can blend up a quenchant that does a specific task optimally....and with repeatability.
Even if you made up a working home brew of water, soap, and oil....every time you quenched, the properties would change due to chemical reaction and water loss.