So currently vegetables don't have a "basic ingredient" one could make from them, like gems turn into jewels and ores into machine parts. That basically means it's not really viable to lvl up a character with veggie gathering, and all the veggies end up at the npc. Basically this would make vegetables a more complete branch of farming by giving a use to those 2-3 grade veggies
So why slippery oil?
First off it makes sense, since vegetable oil is very much a thing.
Slippery oil is on the cheaper side of basic ingredients, and in general people don't really trade those items a lot. So I doubt it'd have much, if at all, effect on the price of these. And there's a built in minimum price to them as a fail safe, set by the merchant price of the vegetables/fish.
It also fits in nicely with in the system in general, as it wouldn't break the balance of needing multiple gathering and production skills to make items. Cooking is used both in fishing (slippery oil) and herb/veggie gathering, so nothing would break on that front.
Option 2:
Another option would be to have grade 2 and 3 vegetables be usable in making recovery boxes. That require a second option of each recovery box, one that would use over a 100 grade 2 or 3 vegetables to make probably 1 box. That's more confusing and you'd get more skill points per fatique there that you would while making basic ingredients. So this option I think is much worse.