Not surprising. With e-10 at summer temperatures about 1.6 ounces of water will dissolve in 2.5 gallons, and what you describe is the way it looks. The moment you pass the threshold, ALL of the alcohol (about a quart) will come out in 10 minutes. B-12 (biodiesel) should have little effect, except that the biodiesel is less oxidativly stable than other 2-stroke oils (the biodiesel could be the problem).
I should have been more specific "B-12" meant to say "Berryman's B-12 fuel additive" I checked the mixture today after it warmed up a little, can't see any trace of the water. So, I am wondering, did it evaporate from the top or is the water still in suspension in the gas?