What properties does it not illustrate?
A cell membrane is selectively permeable, and it is composed of a lipid bilayer. It has both hydrophilic (water loving) and hydrophobic (water hating) properties. I think what the oil in water thing demonstrates is that hydrophilic molecules (the water in this case) cannot cross through the membrane (the oil). What it is not showing is that a real cell membrane has protein channels where hydrophilic molecules can enter the cell.
thank you :D