Are Oil Free Air Compressors REALLY Oil Free?

I just helped a friend fix an oil-free Sanborn compressor that wasn't "pumping up" like it should.

When the cover was removed you see an exposed rod going up to a "piston". All exposed, no oil.

The piston sleeve had split. The sleeve is just about as thick as a tin can (if not closer to an aluminum can).

Amazingly, it was still a serviceable part. Around $20.00 for a sleeve, rod, and piston.

So... On this one the motor is connected to the rod with an eccentric and sealed bearing. Where in the world would oil come from???

The oil-free Craftsman in my garage is the same way but has 2 pistons.