this diagram might help. The ‘saturated steam’ was fed through a jockey valve attached to the regulator handle on GWR locos, regulator fully shut, steam off, slightly open steam fully on. The oil is driven out of the oil container by the head of water in the condenser. In GWR locos the condenser was a coil of pipe in the cab roof. Oil feed is not dependant on how far the regulator is open. If you miss out the Propellant steam connection, it still works but oil feed is dependant on difference between boiler pressure and steam chest pressure, and the wrong way round, regulator wide open least oil feed.. There was an excellent article by I think Fred Cottam in ME many years ago, but I can’t find it.

Its basically how most model boat lubricators work, but we call them displacement lubricators.  The principle is precisely as above, condensate collects in the bottom of the lubricator, which then displaces the oil out at the top.  In model boats this is actually into the main steam line to the engine to lubricate the internal surfaces but in the locomotive example above it obviously then drip feeds bearings and slides etc.  On such small engines as used in many model boats a mechanical lubricator takes too much energy.