Standard pump:
As long as the pump is pulling vacuum, this water vapor (what we often see as smoke/mist), is nothing to worry about. It is not toxic at all and will not cause a fire. It is likely a clogged demister due to overfilling the pump or tipping it. You can remove and clean the demister, replace it, or leave it alone and the oil will drain out of the demister piece and it will correct itself after a couple of batches.
Premier Pump:
This is not an issue. One great feature of the premier oil pump is that the gas ballast will help keep most of the water out of the motor of the pump which is why you can go 20 batches without filtering or changing your oil generally. You will see this water and oil vapor misting (“smoking”) out of the pump. This is normal, make sure you have the machine in a well ventilated room. If the vapor seems excessive the demister may be full of oil, this will correct itself over time or you can clean it.
