Why not?

Gonna +1 this. Heavy oil and light oil are both intermediate products that can't be used directly, so I think this is definitely a bug that production modules can't be used.

EDIT: I just found the solution. One needs to modify the Production Module prototype to add the condensation recipes to the limitation property:
https://lua-api.factorio.com/latest/prototypes/ModulePrototype.html#limitation

I just kitbashed together a quick hotfix mod for this exact problem that also includes optional compatibility with Schall Modules. Atlas, if you're reading, feel free to download my hotfix and incorporate the code. :) It's just two new files that add the condensation recipes to the productivity module's whitelist, and a few extra lines to copypasta into data.lua.

https://mods.factorio.com/mod/petroleum-condensation-productivity-fix

I just kitbashed together a quick hotfix mod for this exact problem that also includes optional compatibility with Schall Modules. Atlas, if you're reading, feel free to download my hotfix and incorporate the code. :) It's just two new files that add the condensation recipes to the productivity module's whitelist, and a few extra lines to copypasta into data.lua.

https://mods.factorio.com/mod/petroleum-condensation-productivity-fix

Hi dragon, sorry for the late response. I have updated the mod to work with 2.0. But I think things have changed since 8 months ago. I tried your code but it just couldn't find the module limitation table (insert code returns nil). I will look into it later. Thanks!

Yeah, things might have changed since Factorio switched to the new 2.0 API. I've honestly not looked back at it myself since I was waiting for your update to drop first. I can stick my snooter into it as well when I've finished writing up another mod I've got planned... whenever I get around to it. xD