I'm going to be politically incorrect and say yes. "The solution to pollution is dilutions" Toxicity is in the dose. The amount of heavy metals and PAH's (Polycyclic aromatic hydrocarbons) is significant. This is likely causing the anti-termite effect.
A 1980 paper reports lead content of around 7500 ppm Zinc at 1500 ppm. (Note that zinc is a micronutrient.) and much smaller amounts of copper and chromium.
PAH content varies from 2 to 300 ppm depending on both the source and the particular PAH involved. Some PAH's are carcinogens, but the health effects paper didn't note higher cancer rates among the mechanics.
A Denmark study of mechanics in 10 autoshops in Denmark found minor problems, but the exposure is chronic, and is likely to be both by skin contact and inhalation.
Other studies have found cancers with exposures of 60 to 1600 mg/kg body weight/day. For a human that higher limit amounts to slathering on 100 grams of used motor oil on your skin every day for your life.
Respiratory effects occur at 40-80 mg/cubic meter of air. This is likely an immediate effect of the oil, and not due to the crap in it.
Environmental effects are significant when there are large spills of oil. This is largely due to the mechanical effect of the oil: It blocks the soil pores. At low exposures the oil part in biologically active top soil is degraded in a period of months to a year or so. You can test this your self by mixing dirty oil with soapy water and spraying it on the ground. It will initially kill vegetation, but by the following year it will be difficult to tell where you sprayed.
In your particular use, you are immobilizing it. Overall, I would regard your practice as being no more harmful than purpose made chemicals for this same purpose.
Don't inhale it. I would suggest taking some precautions about that, but it can be as simple as wearing a mask, and being clever about your technique. If there is significant airborne oil you will notice it first as an eye irritant. In this way, it is toxic the same way paint is toxic.
Do note, however that wood so treated will be extremely flammable.