My understanding of "splitting" from what Chewytikka has said: It is desirable in a good BIR curry that the oil and water have emulsified or become homogenous in texture and remain so upon serving. When splitting occurs the oil and water become separate again and bleed from the dish, on the plate, and this is usually the result of over-cooking. This results in what is considered to be a poor BIR curry. Splitting would in this case be a different thing to simply having excess oil that does not emulsify in the first place and can be spooned off. I have experienced splitting from over-cooking as opposed to simply having excess oil and it doesn't make for a particularly nice dish.
There is science involved in the nature of solutions, solubility and saturation. Certain factors will enhance solubility (emulsification) and others will reverse it.
It is common to see the instruction in Base Gravy preparation as the final stage, to continue to simmer until oil separation. Would this not be similar to splitting, and in this instance a desirable outcome? It sometimes works for me and other times I give up without separation, but I can't, in all honesty, say it's made much (any) noticeable difference to the curries made from the gravy.