Correct installation of the cylinder head is ensured by following the tightening specifications. These include the torque/angle (for each tightening round) and the order in which the cylinder head bolts are tightened. The specifications are found in workshop manuals or from the provider of seal/gasket supplier.
By following the tightening specifications, distortion of the components is avoided and an optimal seal is created between the engine block and cylinder head (and thereby and optimal seal for the combustion chamber, the oil supply galleries and the water cooling channels).
If installation is not correct, the seal between the oil supply gallery and the combustion chamber fails and lets the oil leak into the combustion chamber. Here it is burned off during the combustion phase. The failing of the seal can either be immediate or after many warm up/cool down iterations.