jcwit,
Based on my experience so far, it works (with some limitations).
I have been changing oil in my corolla every 6 months and 5000 miles (I happen to drive 10000 miles a year), just like Toyota recently requires, using quality dino or blend oils. I happened to save a few used oil samples and they all tested #6 of 10, showing that there was still some life left. This is in agreement with card blot tests and previous UOAs I did. Changing oil on #7 or even #8 (green turning on yellow) would be probably optimal in this application.
Now, limitations. Like the OP experienced, fuel dilution or unusual oil formulations confuse oilyzer. HDEO, oil additives, and MMO read all over the scale. Even Maxlife synthetic starts at #3.
I had a few weird, unexplained readings (probably contamination in the sensor). Now, I test a least twice and accept result if there is an agreement. Cleaning between tests is a must.
Bottom line. If you use a typical oil and there is no fuel dilution, this gismo works.