Hello everyone,
I work for a filter company and I think I can shed some light on the topic. I understand it is a kind of old thread, but I have some good input. Our system has been designed to work with any engine big or small, gasoline or diesel. Here in the US, LPG hasn't been used for fuel in anything for quite some time (the last vehicle I saw was a tractor from the 1950s), but I would assume it would work well with that setup all the same. The toilet paper will NOT dissolve under any circumstances, while paper easily dissolves in water, oil is a completely different story. Even under the high pressures and high heat of a diesel, it stays completely in tact.
As far as what the benefits would be, you are constantly filtering down your oil to about 2 microns. For reference, the OE full flow filter will filter down to about 20 microns. This is not only filtering out all of the combustion products (i.e. soot), but also the very small wear metals every motor creates. When you take out all these contaminates, you greatly improve the engine life. Many people do use it to get longer intervals between oil changes, but if you do this, you need to do an oil analysis when you would normally change your oil to get a good idea of the usable life left in the oil. So long as the viscosity is good, soot and oxidation are low, and the TBN is good (5 TBN+) the oil is still safe to use. Our parent company also makes a full synthetic oil that has been used in semi trucks with bypass filters for 100K miles plus. Different application obviously but gives a reference on the actual durability of a high quality oil.