Stan, thanks for bringing this up. Earlier this year there was another topic (Alternative to Smoke Oil) about a ready made product by the UK company TRS Trains for exactly this purpose.
In the other thread concerns were raised about the proximity of water and electricity. It may be a little known fact that uncontaminated distilled water is non-conductive. Distilled water is what is recommend.
As far as humidity and rust are concerned, since the mister distributes the water vapor fairly well up into the air, if one is following the recommended practice of keeping their trains in a climate controlled environment and running a dehumidifier, I would think that running one or even a few of these small misters occasionally would not be an insurmountable problem.
I believe the biggest attraction to these would be for individuals who are unable to use traditional oil based smoke units due to respiratory issues within their household.
Here are some links with more info: https://www.keymodelworld.com/...sed-smoke-generators
Their facebook page is: https://www.facebook.com/trs.trains/
and their email is: trstrains@yahoo.com
Scale: 'OO' and 'O' gauge | Price: from £100 (excluding decoder)
I fully appreciate that most model train enthusiasts would prefer to stick with the traditional oil type smoke units, but there may be a few who would like another alternative, especially if it could be DIYed inexpensively to fit inside the limited available space inside a locomotive.
I'm interested to see where this discussion might go towards that end...
