Hi,
There is currently no built-in or pre-defined physics mode in the GUI available for two-phase and multiphase flows. However, there are two experimental example m-script models of two-phase flows using the level set method that are quite similar to your application. Note that the level set implementation lacks re-distancing/reinitialization so the simulation will likely diverge and give poor results after some time without it:
https://www.featool.com/doc/ex__multiphase2_8mhttps://www.featool.com/doc/ex__multiphase3_8m