There are two reasons for adding cell oil in open NiCd cells (prismatic cells of 10Ah up to ca. 1500Ah):
1) Some NiCd electrode technologies have organic additives, which could result in foam formation of the electrolyte. Anti foam emulsions or cell oil could prevent (reduce) that.
2) The water evaporation of the electrolyte could be slightly reduced (especially at high temperatures).