No lagging makes the metal last longer. Lagging reduces heat input to the engine room and reduces the probability of severe burns to personnel from accidental contact with hot surfaces.
The soft lagging, or "blankets" can usually be removed and replaced ... once. After the engines have been run hard for a few hours, the binders that hold the glass and ceramic fibers together as batting, yarn, or cloth, have burned off, and the blankets become friable.
If the hemmed ends of the blankets are installed right up against a hot flange, or over it, as many owners do, the heat resistant (but not fireproof) fabric cover will no longer be able to retain the wire inside, and you won't even get to reinstall the blanket once; it will just fall apart when you untwist the wire.
Usual practice of boatbuilders wrt to soft lagging is to install it a little loose for construction and development, and tuck in the hems and tighten the wires after sea trial.
There are at least three variants of hard lagging. The kind that looks like a plaster cast is durable enough, but easily stained and impossible to clean. It can be applied in situ, but it is messy.
Hard lagging with a glossy finish can be done with boat resin, but the resin burns away at the flanges, and is not itself fireproof. It can also be applied in situ, and is messy. It can be done in a variety of colors. It resists staining and is easy to clean.
Hard lagging with a glossy finish that _is_ fireproof is available from several marine exhaust vendors, only in black. It resists staining and is easy to clean. It chars at really hot flanges, but does not burn. It is extremely messy to apply, and must be oven- cured, so it can't be done in situ.
Mike Halloran
Pembroke Pines, FL, USA