TL;DR - When checking in your luggage try asking if you can send your luggage directly to Iceland or vice versa. This will save you from going out through the passport control, picking up your luggage and checking in it again.

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I made a mistake of having my connecting flight tickets booked separately with only 1 hour of layover in between.

This got me concerned about my check in luggage transfer. I sent a message to Emirates airlines and IcelandAir regarding my concern and they said that they cannot link my bookings because it's booked with a different airline so I would need to go out through the passport control, pick up my luggage and check it in again.

Luckily, I saw this post link and sent a dm to the poster. I asked him how was the departure process in Oslo airport. He mentioned that it only took him 10 minutes to go through passport control, get his luggage and exited. This gave me confidence to just go through the departure process and re check in my baggage and still have enough time to catch my connecting flight. (I also prepared my self to pay extra just in case I missed my flight.)

But wait, there is a better solution. When checking in your luggage try asking if you send your luggage directly to Iceland or vice versa. This will save you from going out through the passport control, picking up your luggage and checking in it again.

I did this in both of my flights going to Iceland and back to Dubai.

Hope this helps.