Earlier quoted context omitted.
Insulation distributes heat release over time, at the cost of temperature control. If its going to be used all the time, especially with multiple units, distributing release over time doesn’t change much but the delay between first turning it on and full effect to the surroundings, and the impact on temperature control is still there. Insulation is only effective with intermittent use.
No. If it was only effective with intermittent use then we wouldn't insulate water heaters as they're 24/7. Insulation slows heat flow and thus means the hot side rises to closer to the temperature of the heat source and thus there is less energy transfer.
Water heaters are not running 24/7.
The entire point of water heater insulation is that you run them to heat up the water in the tank, then the water sits there at temperature, and when needed it has a fast response time (and also actually provides hot water as the heating loops generally don't have the heating capacity to bring the water up from ambient or sometimes just above freezing to sanitary at the flow rates users ask for).