Hold on. I don't think it’s a matter of sanity.
Personally, I'll continue to boil off the factory oil before I wax a trap. But I don't necessarily see that dunking an oily trap in wax would necessarily be a deal breaker. I've almost given up thinking that traces of oil and the like are particularly noted by the canines. I got broke of that when I dipped some traps in gasoline dip, and caught critters in them.
I don't think traces of oil in a wax pot would necessarily be an odor that would be alarming to, or attract the attention of, the target animal.
Me, I like to keep all contaminants out of my wax pot, but I really wouldn't doubt the success of a fellow who just went ahead and waxed oily traps.

-- Hal