I had the same concern, and emailed Watco. Here is their response:
Hi Bill,
Thank you for contacting Rust-Oleum Product Support.
We appreciate your interest in using our products for your project.
The cautions on the cans refer to the liquid form of the coating and are driven by the solvents in it. Once the coating is fully cured, the solvents have evaporated and are no longer in the coating; the remaining coating is the resin and can be considered non-hazardous and non-toxic.
Our Butcher Block Oil penetrates into the wood, drying in it, not on top of it. Once fully cured after 72 hours, it is considered food-safe for contact (meeting government standards of 21 CFR 175.300).
If you have any additional questions or concerns please do not hesitate to contact us.
Regards,
Kelli
Stand for something, or you'll fall for anything.