If you fall under IRC, IRC requires most framed walls to include a Class I or Class II vapor retarder on the warm side of the wall during the heating season. For NJ, that would be the interior side.

Vapor retarders are separated into three classes:

Class I: Less than or equal to 0.1 perm (6-mil polyethylene);
Class II: Greater than 0.1 perm but less than or equal to 1.0 perm (Kraft facing);
Class III: Greater than 1.0 perm but less than or equal to 10 perm (interior latex paint on drywall).

There are exceptions: if the wall has an adequate thickness of exterior foam sheathing OR if the wall is vented, ie, it has an exterior rain screen between the sheathing and the siding, then you can use a Class III retarder, which can be simple latex paint on the interior walls.

If you use kraft faced insulation, then staple the paper to the 1-1/2" wide edge of the stud. Do not staple it to the side of the stud inside the framing bay.

As to moisture movement, yes, 6-mil poly will stop diffusion and drying whereas kraft paper allows some albeit at a slow rate. If you tend to have exterior siding (like vinyl siding) that easily passes water, and if you don't have any housewrap under that vinyl siding to shed moisture that gets behind the vinyl siding, then Kraft paper may be the better choice.

Walls can get wet, then when the sun hits the wall, moisture can be driven into the wall assembly from exterior to interior. If moisture gets into the wall, you want it to be able to dry. 6-mil poly really only allows drying back out to the exterior, reversing the path that allowed it in. Kraft paper, with it's higher perm rating, allows allows a bit of drying to the interior.

So you are correct, 6-mil poly is indeed a better vapor retarder than kraft-faced insulation with regards to stopping vapor diffusion. But you might not want "the best" vapor barrier in your wall assembly if you have lousy walls.

The whole vapor barrier/retarder business can be quite confusing. Most inspectors don't even understand it.

The only time I usually recommend slashing the kraft facing on FG batts is when someone is adding more kraft-faced insulation over existing kraft faced insulation, or if they are adding 6-mil poly over the entire wall after kraft-faced batts were already installed.

Remember, paint is quite permeable. Grout is permeable. So you would not want to slash the kraft facing behind painted or tiled drywall.

I guess my walls are considered not good. 1963 homosote sheathing with tar paper and painted cedar shakes. 2x4 walls. So you are saying go with kraft faced to allow moisture to exit to the exterior and interior.

Kraft it is.

great, thanks for the advice !