Partially at best. Water displaces air in the pores and multiplies conductivity (wet wool can conduct 5–20× more than dry); if it dries fully and the binder is intact, much of the performance returns — but in service it rarely dries fully (the jacket that let water in keeps letting it in), chloride residues stay behind on the steel (CUI fuel), and repeated cycles degrade the structure. Practice: treat soaked wool sections as replacement items, find and fix the water path, and on lines that get washed down or live outdoors consider non-absorbent materials or removable covers that can be taken off to dry.
Compute your own case: free heat-loss calculator · materials library: 12 datasheets · related: Does insulation stop condensation on cold pipes? · How long does industrial insulation last?
