Lanolin isn't a pure product, but is a mix of organic hydrocarbons.

As far as I can tell, the unrefined product will be somewhat waxy, highly viscous, and not very water soluble.

They've apparently refined (distilled) out a fairly light oil. Saponification of some of the fatty acids will increase water solubility, but may not lead to desired results. Perhaps moderately long chain alcohols would dissolve in ethanol, and become moderately water soluble. Once the ethanol evaporates out, the solubility would decrease. So freshly applied product would wash off, but old product would not. Polymerization of the organics?

Anyway, it might be fun to test.