"while conventional gasoline can dissolve up to 150 parts per million of water at 70°F, the situation is different for gasoline oxygenated with 10% ethanol. This 90% gasoline/10% ethanol blend can dissolve up to 7,000 ppm of water at 70°F. When this blend is cooled, both the water and some of the ethanol become insoluble. Contacting the blend with more water also draws ethanol from the blend. The result, in both cases, is two layers of liquid, an upper ethanol-deficit gasoline layer and a lower ethanol-rich water layer. This phase separation of the gasoline/ethanol mix lowers the octane number and may cause knocking in an engine, while the engine will not run at all on the ethanol/water layer."
https://petroclear.com/resources/dont-be-phased.php