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As exhaust gas cools, it contracts, effectively reducing the volume of the exhaust pulse as it cools and moves towards the exit of the exhaust system. A hot, fast-moving exhaust pulse is adversely affected by restriction in the exhaust system, thus why headers and oversize exhaust pipes are used in high performance exhaust systems.
The primary function of the exhaust wrap is to prevent heat soak of the engine compartment in high performance vehicles. A use for FE purposes could be to improve thermal efficiency of a conventional ICE. To effectively do this (you will lose th cost battle, tho) you have to take advantage of the improved thermal efficiency, i.e. reduce cooling capacity, slow water pump drive, change timing/fuel delivery map, etc.
Scientifically, the more thermal efficiency you have, the more "calories" you convert to motion versus losing as heat. Sounds like a costly experiment, but it would be interesting...
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