the wrap works on the basis of thermal efficiency. it is
essentially a heat insulator which keeps the heat generated by the
exhaust away from the engine bay and within the exhaust piping
itself.
the hotter your exhaust downpipe, the more efficient it is at
extracting spent exhaust from ur engine during the exhaust stroke
of the combustion cycle. This results is less power loss by the
engine in "pushing" the gases out and therefore, you feel that the
engine is more responsive.