What is meant by “cook until the oil separates” in Indian curry recipes?

Question

A lot of Indian curry recipes have a step where you're told to cook an onion-tomato-spices mixture "until the oil separates". Despite having tried cooking such recipes a number of times already, I still haven't really figured out what is meant by this. I have several questions:

1. How can I tell that the oil is separating? I'm never quite sure whether I'm seeing oil or water coming out of the mixture while it's cooking.
2. How long on average do you need to cook the mixture until the oil separates?
3. What causes the oil to separate? Is it simply that all the water has been cooked out of the mixture?
4. Why do you need to let the oil separate?

Answer 1

1 - Oil is separated in curries normally after you have cooked spices or sauces for ~10-15 mins. You can tell by seeing "bubbles" appearing and the oil by making a thin layer on top of your sauces/curry.

2 - It varies, but normally after 10-15 mins the oil separates from your curry.

3 - Normally after cooking for 10-15 mins most of the water dries up which causes the curry (mostly made of thick sauces) to separate from the oil.

4 - It's always good to let the oil separate from your curry because of two things:

a - Extra water dries up
b - All spices and curry get cooked properly

The food tastes much better if spices and the curries are properly cooked.