2-part question about insulation in basement

Hi all.
In the pic below is a pic of my basement sump and ejector pump room and is the only area of my fully finished basement that has any drywall removed because a few months back I had to replace the sump discharge line because the old one fractured so I had to discard the insulation and drywall. I left the area open so I can monitor the new discharge pipe and well simply don't feel like reinstalling drywall lol.

Fast forward a few months and well I'm glad I left it open because I found water seeping in during a pretty damn heavy rainfall we had on think January 11th. I suspect that sewer main seal OR cove joint seepage due to heavy ground water 3ft from foundation outside, but won't know until I pull out that wall next.

So my plan is to cut out the drywall only up to the sewer main exit which is roughly 3-4ft off floor to see if the sewer main seal is the culprit, evidence of water run stains.

1) My question is, will removing more drywall and insulation in this room affect the atmospheric conditions of the basement? I'm not doing away with that poorly installed vapor barrier though just the drywall and insulation. It's so hot down there in winter and I like it that way. I always leave the door to this room fully open so that the plumbing in there and the adjoining bathroom stay conditioned warm during winter and also gets proper dehumidification in summer. Last thing I'd want is to have the balanced elements somehow change with leaky humidity or just air in general.

2) If I do decide to redrywall, I'd like to use whatever insulation was in there before because whatever it is, it does a damn good job in the basement. The insulation doesn't have any paperbacking it's incased in plastic. Can anyone help me identify this insulation from the pics? Thanks