Why do I need to keep Led drive and photodiode ADC supplies and traces separate in a pulse oximeter design
While you do have a point that it might make sense to compensate for variations in the LED brightness caused by power supply fluctuations, the hint is very important to adhere to. The LED is not just lighting all the time, but it is pulsed. The circuit very likely uses lock-in like techniques to filter the photodiode signal for the parts of it that are in response to the LED pulses. It is extremely important that the feedback from driving pulses to the LED to observing those pulses at the photodiode is purely optical, because otherwise the optical signal us obscured by the electric cross-talk. If you don't decouple the LED supply sufficiently from the detector supply, you will get electrical feedback as well because the supply voltage will surely drop a bit when you pulse the LED.