We have not heard this one before, but coming as it does from the pros at Kansas State University you had better listen up.  Here’s what they say:

While buying locally grown fresh or dried herbs at summer markets is an inexpensive way to get acquainted with new flavors, Karen Blakeslee, a K-State Research and Extension food scientist, cautioned consumers about buying oils flavored with herbs.

Such oils are prohibited from sale at farmer’s markets, said Blakeslee, who as coordinator of Extension’s Rapid Response Center spends her working hours answering food and food safety questions. She explained the reason for the ban:

When in a sealed container at room temperature, an oil-based herb mix creates an anaerobic (absence of oxygen) environment that can support the growth of Clostridium botulinum and produce botulism, a toxin that affects the central nervous system and can cause death. Botulism has, for example, occurred with homemade garlic and oil mixtures stored at room temperature.

A flavored vinegar, which has a high acid content, an acidic environment, is not typically a food safety hazard, Blakeslee said.