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I worked in an exhaust shop many years ago, and we ran into this all the time. The main reason they cracked was because of heat, not moisture. The wrap holds in the heat, which gives the header better flow. Unfortunately, this horrendous amount of heat causes the pipes to crack. There were other variables involved like the thickness of the pipe. A 2" diameter exhaust pipe could be had in 14, 16, 18, or even 20 gauge. Needless to say, the 20 gauge disintegrated pretty fast and would crack in no time at all.
Generally, on a carbed V8, it tended to be the tubes on the outer 4 corners that would crack the most. This was due to those cylinders running a bit lean compared to the inner 4.
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