Hi, if I'm using tinned tomatoes, which are already cooked. Do I still need to cook the masala until the oil separates? I'm assuming that cooking the masala until the oil separates is to make sure that the tomatoes are properly cooked.

No, it is not to cook tomatoes. Tinned ones are already cooked. It is to cook the spices to a point where they release their flavours.

I would say it is the point beyond which the emulsion breaks down, and it is very easy to end up with a very oily product, with little or no water. Certainly, the oil will contain most of the flavour, but it needs to be evenly distributed throughout the sauce/gravy.

Thank you for your advice. I will make sure to cook the spices well in future.