Oil has always increased the draw for me. The oil itself should not do any harm to the blade, I've always felt that cleaner leather fibers had more effect on the edge. YMMV
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I use it. The pure stuff from a leather shop. Tandy Leather has the pure stuff. I hear what the other members are saying about to use sparingly. I went the other direction. I used a 1/4 cup on a Big Daddy strop. It did reduce the draw considerably . It has been over 6 months. Not sure how long its supposed to take before my strop breaks down, but as of now it works like a champ.
Leather is all about time. Years of it. Too much oil will deteriorate leather just like too dry. Tandy has both kinds of NeatsFoot oil if you look at the bottles. I use liquid Glycerin to clean all leather. Most of it is a compound with things added to condition the leather for longer life. Use Neatsfoot sparingly and some of you may have an allergic reaction to it. It comes from oil in the bones of Cows. God put it there to keep their legs from freezing off in the winter. It's the only thing that saves them really. It can be good for a dry strop but best if only a few drops are spread over the whole surface. Some of the advice I have read from the old timers around here is apply it to the back of the strop. What does that tell ya ?
Over 40 yrs in leather work, the honorable hidestoart has rolled his own oil treatment. 'Tried some of the leather treatments from the local leather shop. None soaked into the shell strop - until I tried his. You'd have thought it was dying of thirst. He won't say what all is in it, except for some anti-mold or mildew stuff. It works beautifully. We traded blade for a leather burnishing tool that has been fabulous for keeping the surface smooth. One of his gorgeous strops (Horse butt) is my daily driver, and the best strop I own. I am biased. I think he's wonderful. I suspect others will form a similar impression.
Neatsfoot oil works well; use very sparingly!
I prefer to treat my strops with pure carnauba wax.
That is a good question.
A one time application, IME, would not rot the leather. But, repeated use of heavy oil application, would, based on what I've read, destroy the leather.
Use of oil allows the fibers to move easily. But, the water moisture is also needed. It is a fine line to walk.;)