Visible-sized water droplets in oil are very resistant to evaporation and forming emulsions in stationary hot oil that is < 100 C. If the oil and water droplets undergo shear, it increases the emulsion tendency, which allows for increased water evaporation rate. If a water droplet gets hot enough, it suddenly turns to vapor and the vapor portion is ejected from the oil. I’ve observed all of this many times in bench tests that started with a water droplet in oil, not an emulsion. What I don’t know is under what conditions, if possible, visible-sized water droplets sink to the bottom of an oil pan. Most of us have seen pictures of milkshake emulsions on the underside of oil fill caps, which forms from extremely humid air in contact with oil, rather than from an intrusion of visible-sized water droplets.
Significant concentrations of water in hot motor oil results in chemical reactions with some metallic additives, causing visible white solid precipitate to form. I don’t know if it’s from ZDDP and/or detergents and/or MoDTC.
As the lady who designed GM’s oil life monitor said, if you want to ruin an oil quickly on a mileage basis, give it the old grandma duty cycle. Every week, only take short trips to/from church and grocery store.