While linseed oil may not be directly applied the bun off of it is gonna make food taste like paint. Honestly just get the angle or die grinder out and cut that liner out. It's really not needed for much more than cosmetics
Any oil will work against rusting due to it displacing moisture. But moisture is not the enemy of that lid liner. Those literally corrode away due to exposure of so much heat opening up the metal pores and then condensation getting into it when it cools. No amount of "coating" with oil is gonna stop that