The oil level light is a warning lamp and as such it comes on when the level gets below the midway point between the marks on the dipstick. It alerts you to check the oil.
The light cannot come on until the oil temperature is approximately 80*C and in my vehicles once it comes on it goes off relatively quickly. As the level continues to drop the light stays on longer. When it stays on pretty much constantly my cars take a quart of oil. Most of them will be at the point of needing an oil change at that point so I change it. If the level went below the minimum level to light a dash light, the color would be red, and the motor should shut off.
Hope this helps, Jim
1986 Euro 190E 2.3-16 (291,000 miles),
1998 E300D TurboDiesel, 231,000 miles -purchased with 45,000,
1988 300E 5-speed 252,000 miles,
1983 240D 4-speed, purchased w/136,000, now with 222,000 miles.
2009 ML320CDI Bluetec, 89,000 miles
1971 220D (250,000 miles plus, sold to father-in-law),
1975 240D (245,000 miles - died of body rot),
1991 350SD (176,560 miles, weakest Benz I have owned),
1999 C230 Sport (45,400 miles),
1982 240D (321,000 miles, put to sleep)