I convinced myself the coalescing filters are the way to go and equipped nearly all my milling machines with them. I don't think you need to spend $3500, I got the Keller TKO 14 Tramp Oil Separators for Individual Sumps TKO Series Coalescing Tramp Oil Separators
and use them on MiniMills and VF2s. I also have a larger version but it is overkill.
I have found out that it is not necessary to run them all the time. Actually they are so efficient at coalescing that if they are run 24 hours a day eventually they will start separating the coolant from the water.
An open mind is a virtue...so long as all the common sense has not leaked out.