Place potatoes in a large pot and cover with salted water; bring to a boil. Reduce heat to medium-low and simmer until tender, about 20 minutes. Drain; steam-dry, 1 to 2 minutes.
Whisk oil, vinegar, water, and Italian dressing mix together in a bowl until well blended. Set aside.
Slice potatoes until chunky; place in a large bowl. Stir in dressing; toss to coat, then cool. Stir in bacon, celery, pickle, and green onion; fold in mayonnaise until evenly distributed.
