I've just picked up a used stock muffler to replace my anti-socially loud one I have on the car (it came with it - not sure of the make).

Anyway, the stock tips I have seem fine and the valves appear functional, but there's white powder coming out of the outer stainless steel wrap on the muffler box. What's inside a stock exhaust ? I presume a simple box which is then wrapped in some kind of heat material then the whole lot has the outer stainless wrapper with the "no touch" hand stamped in it.

I guess the heat layer is disintegrating so is this a big deal and is it common ? What are the implications if I fit this silencer as I really want a stock sound - I have my reasons.