That's a really great question, and there's no single answer but I'll try to provide you with insight on how you might best approach this.
Basically, you're applying to study Italian from scratch, so technically you're not required to know much in terms of language, but you do need to be able to explain why you want to study it. For me, one of the main reasons I wanted to study Russian was because of the language itself, so I learned the Russian alphabet, a number of conversational phrases and some basic grammar. However, some of my classmates had a surprisingly low level of Russian (they didn't even know the Cyrillic alphabet when they started attending Oxford!) - that said, they were from top private schools and probably had lots of support with their applications, so I wouldn't base your preparation on that.
I've just read the following on Oxford University's Italian page: "we do expect students wanting to study Italian from scratch to have done some preparation on their own before they start the Oxford course" - Honestly, based on this, I would say there's no harm in trying to learn Italian up to about an A2/B1 standard. If I had to put a percentage on how much time you should spend on language vs other areas of study, I'd say focus about 30% of your energy on language, and 70% on other things like literature, art, film, culture. This is based on the large emphasis that Oxford places on literature - during the final year, language comprises a very small part of the course and final examinations.
Another thing - do NOT forget about the importance of translation. Translation is a core part of the MML and Classics courses across all four years at Oxford, and tutors would like to see that you have at least thought about the importance of translation in language studies. You don't have to be an expert, but I would suggest reading up a bit on translation theories and the art of translation. Additionally, I would strongly recommend anyone applying to study languages to take part in the Anthea Bell Translation Competition held by the Queen's Translation Exchange (application window closes 3rd of April) - unfortunately this is only for UK schools currently. However, the Queen's Translation Exchange also hosts a range of both in-person and online events which I would highly recommend looking into!
Actually I've just remembered a book which might really suit you - it's called Through the Language Glass by Guy Deutscher. There's a very interesting discussion on colour in ancient texts and how modern translators have justified their translations of colour in these texts - definitely worth a read if you're studying Classics! There's also 'Is that a fish in your ear' by David Bellos, which I personally found a bit less accessible than Deutscher, but idk, you might enjoy it!
It is important to at least be aware of the major authors in the target language. For Italian, this would obviously be writers like Italo Calvino, Dante, Petrarch, Machiavelli, Pirandello, etc. However, don't fall into the trap of thinking that Oxford tutors just want to hear about these - they genuinely want to see your passion and interests shine through, so if you're passionate about a slightly more niche work (should still be by a highly acclaimed author), then by all means pursue that. It would be great if you could find a particular style, genre or author which you really enjoy and then deep dive into that, because Oxford highly values the ability to thoroughly research an area of study.
Let's take an example of finding a niche and researching it: let's say you're interested in one particular historical period - first, conduct some basic research on that period (what came before, what came after?); second, read some texts written during or shortly after that period (how do they reflect the circumstances in which they were written?); third, explore the artistic context of that period - this could include watching films which were made during or shortly after that period; fourth, if possible try to attend some academic webinars/events which discuss this period. If you want to put the cherry on top, you could read some critical analyses or comparisons of the texts which you read from that period (secondary reading), as this is also a huge part of the Oxford language degree course.
3) Culture, art & film
If you are interested in Italian culture, art or film - don't be afraid to mention this in your application. Just be prepared to talk about it in depth! That goes for anything you mention on your personal statement. I mentioned 3 films I had watched which were made after the fall of Franco's dictatorship in Spain and explained why I enjoyed them, I also mentioned Gaudi's architecture as I was really into this at the time.
If you aren't particularly interested in Italian history, that's perfectly fine. To be honest, I wasn't hugely invested in Spanish or Russian history (I was more interested in language and literature) when I was applying. That said, just to be safe, I printed off about 20-30 pages from Wikipedia's 'History of Spain' and 'History of Russia' (I think I just copy and pasted the bits that looked most interesting and relevant at a glance), then I read through that and highlighted key dates/people. This came in handy because then I could point to specific dates which were relevant to the literature we discussed in my interview. You certainly don't have to be a history expert, but I just did that because I was determined to prepare as much as possible!
Now with all that said, the ONLY thing you should take away from all this is that you need to find what YOU enjoy most and explore that. Interviewers can tell immediately if you're not passionate about something. It will also make the interview way more enjoyable if you're talking about your own interests and passions! I really loved finally being able to geek out about Spanish and Russian in my interviews (because I couldn't really do that with my friends). Man, Oxford really is wonderful
I wish you all the very best with your (potential) application!!
P.S. I also wrote two in-depth blog posts on how to approach wider reading as a language applicant to Oxbridge - just google 'LinguaTute Wider Reading for Oxbridge' and it should come up!
Let me know if you have any further questions