It all depends on the item you are going to paint. If it's something that won't be thrown around or subjected to abuse I don't see anything against using such a paint. But if you are talking about a knife or tools such coat of paint would make sharpening a hassle and it would start peeling after few uses. On the other hand 15 years back found a small table knife (all steel) when hiking. I took it home and cleaned it and sharpened it. Since I wanted to add a personality touch to it I dipped the handle in the can of orange oil paint. That happened when I was 10 years old. That knife served me well for a year or so, than when leaving for New York I stuck it behind the garden house. My dad found it past summer and told me that handle was perfect while the blade was all eaten up. So it works but in above case painting the blade would be highly unpractical.

Matt