Not to down play a worn rings issue ,but this is a part.
One by-product of combustion is water vapor.Just part of blow-by (includes CO2,NOx, SO2, NO2, particulates, H2SO4, various hydrocarbons used ,or perhaps not, benzene...) .
Another water source? The crankcase, being open [to perhaps humid air] breaths with changes in barometric pressure. Water collects inside because the iron is often colder than the surrounding air (from sitting in an unheated environment all night,the coldest part of the day). This may happen over and over if the engine is NOT used, building up a substantial amount of water (it often ends up in the oil). When started the engine gets hot. This water gets vaporized and ejected into a relativley cold environment. The vapor condenses into a white mist much like the clouds above. JimK
p.s. ,and all rings leak ~4-10% std , 2-4% gapless, though good race car builders strive for 0% (during a leak down test~100psi). In the real world it's less, even though the pressure is much higher, because pistons expand and the seal improve and more importantly, the time available for the leakage is much less.