Do you mean heat wrap on head pipes like -->
<-this->?
Or do you mean fiberglass packing around a baffle?
The heat wrap does help hot exhaust gas flow better which helps performance. It has become fashionable / trendy to wrap exhaust pipes rather than getting them chromed and shielded.
The whole performance edge goes out the window if the motor is not breathing correctly. Heat wrapped pipes just to capture the cool look of wrapped pipes will not help anything much if the motor can't breathe right.