They used water base first, was it a clear sealer, could it be fine and
the oil did not adhere to it? Are there gaps in the wood to allow air
movement. It could be a reaction of the latex first coat and oil
topcoat that the oil did not bond. Find what they used and call the
company that made it. Im sure it wasnt a solid oil stain 2nd coat,
soild is paint without the hardner, solid might peel but transparent and
semi transparent I have never seen peel direct on wood . At least it
comes off easy. A product like Thompsons has wax and nothing will bond
to it. If the latex first coat had silicone or another water repellant
that could be the issue then you will need to wait till it weathers. I
think the 2 products were incompatible.