That is a good point.

If the rust is between metal and bubbled paint, and Waxoyl is applied on the bubbled paint, Waxoyl may accelerate rust by keeping moisture below the bubbled paint. When the paint flakes off, the area may be too large for Waxoyl to self heal.

But if the rust is already exposed, it will be OK even if it is moist.

For expample, Eureka Fluid Film says their wool wax can be applied on moist surface.

A machind translation of a Russian Waxoyl web page says it can be applied on moist surface due to moist repellent additives.

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1992 300D 2.5 turbo diesel. 319 k miles.
124.128 chassis, 602.962 engine, 722.418 tranny.