where does the ethanol go?
Basically you are asking what is the partition coefficient, don't you?
Ethanol and water are miscible at all concentrations.
Ethanol and Toluene on the other hand?
Ethanol + Water forms 1 phase.
Toluene + Water forms 2 phases.
Ethanol + Toluene forms how many phases?
Ethanol + Water + Toluene forms how many phases?
If two phases, will the ethanol be in the water phase or organic phase?
Will it even matter if the product is non-soluble in water?
Would it not then rather go to the organic phase, even though there is an EtOH/H2O solution present in the sep funnel?