The wiki article says not to confuse Iron(II) Oxide with rust, which is considered Iron(III) Oxide (Fe2O3). You just misread wiki.
When I say unstable, I was probably confusing and wrong for saying it like that. In this specific reaction it is either slightly less thermodynamically stable, and thus Fe2O3 forms more, or just as likely it is not as kinetically favorable (forms slower the Fe2O3).
And FeO is easily turned into Fe2O3 in the presence of OH-, I do not know what I was thinking yesterday.