As far as I understand, Rancid just means it doesn't taste as good as it should but generally doesn't otherwise result in less-healthy or less-nutritious food. Am I incorrect?

I'm not an expert, but I think rancid oil is oxidised oil and thus acts like any oxidised chemical: it tries to steal an electron from somewhere else, including inside our bodies - "free radicals" - which can damage things like our DNA. There's also some link to how it can change the behaviour of proton gradients in our cells (I read about it a while ago in "The Vital Question" by Nick Lane) but I'm sketchy on the exact details.

If it’s already oxidized it’s not trying to steal any electrons - the oxygen already has. Case in point - CO2 is the most oxidized form of carbon and is very low energy and nonreactive.

It depends on the chemical. CO2 is not electrophilic, but something like an aldehyde, typically biochemically formed by oxidation, is electrophilic and reactive. The body biochemically oxidizes ethanol to acetaldehyde, whose reactivity gives it carcinogenic properties. Toxic aldehydes formed when fats degrade include acrolein and malondialdehyde: "Malondialdehyde results from lipid peroxidation of polyunsaturated fatty acids."

1. https://en.wikipedia.org/wiki/Acetaldehyde 2. https://en.wikipedia.org/wiki/Malondialdehyde

But that oxidation would occur anyway whether it's on a shelf over time or inside of our body... wouldn't it?

The high temperatures used to fry foods accelerates oxidation. Repeatedly using the same oil to fry foods at high temperatures (such as in factories and restaurants) leads to greater oxidation. Long shelf life food often has oil or was fried in oil that was heated to high temperatures. However, just leaving oil long enough exposed to air will also lead to oxidation, just at a slower rate (though I think highly refined oils, like those used not for cooking, have a slower or negligible oxidation rate "in air" but are usually not edible).

Might be one of those genetic things, or conditioned response. I'm extremely sensitive to the oxidized oil note. But my partner doesn't really notice it until it's gag-inducing to me. E.g. I can't eat mixed nuts if they have been opened more than a few days (regardless of how well re-sealed)

Interesting! Yes, possibly genes have some role here. Alternatively I've heard that your taste is affected by your body nutrient levels. A friend of mine found they could not taste zinc sulfate until they started supplementing it. Once they supplemented it, it tasted really bitter.

If you can’t tell, why does it matter whether it’s rancid or not?