[Editor: we tried it in the kitchen and found that if the oil was hot enough the butter solids browned as usual. The original questioner who was learning to be a chef at the time eventually answered his own question as follows.]

After experimentation I discovered that indeed the olive oil didn't prevent the butter solids(fat) from burning, but it did prolong the time it took for the butter solids(fat)to burn. Here's how it works. Start with oil(it doesn't have to be olive oil as was believed)in a hot pan. Add butter. As the butter melts the water in it floats to the top of the oil. Then the butter solids(fat) float on top of the water. The water acts as an insulating barrier between the hot oil and the butter solids(fat). As long as the water is there the butter solids don't brown. Eventually, the water does evaporate through boiling and the butter solids(fat) are exposed to enough heat to brown.