I had vinyl wallpaper on wallboard (the kind that it comes with from the factory) in my kitchen. I peeled it off, used Kilz to prime it and then painted it with latex paint. I took off the strips that cover the seams and did some taping and mudding too. Came out pretty nice. I also did a little test area where I just used the kilz over the vinyl wallpaper and it worked.. however I've seen pictures of some where it peels off after awhile. The Kilz leaves a good surface for you paint to stick to. My vinyl wallpaper was very easy to peel off.. like contact paper.

Research wallpaper removal...there are a lot of posts online where people share their techniques to minimize drywall damage. A steamer might also make the job easier and minimize wall damage. The painter did not want to do this because it is a PITA job...of course when she showed you...it caused damage; it sounds as if she did nothing to mitigate it so it became a job she did not have to do. Removal and repair will be tedious, somewhat messy, but totally doable for someone who researches. Also research drywall repair techniques after removal of wallpaper. Once the wallpaper and paste is off, buy a small piece of drywall; replicate the damage you see on your walls, and practice repairs with drywall compound, types of trowels or blades for the kind of damage, sandpaper/sanding blocks/sponges, and spray texture (recommend for ease of use) if your walls have any kind of texture to them. Remember building up thin layers of compound (dry each layer before you add another) instead of one thick layer works best for repairing any deep damage. You can do this if you research and practice. I taught myself after waiting years for my husband to find someone to repair the walls of our large de-papered family room. I got fed up with his procrastination again and just started...no one can tell what was de-papered/repaired and what wasn't. Patience, diligence, and persnicketiness are important.

looks like mold to me. as a minimum wash it with a bleach solution. vinyl paper will trap moisture behind it. mold likes damp places the best. you might consider opening the wall to see if the mold is growing in the wall cavity and has spread to the front side of the plaster or if it is limited to the areas you can see. If it's the latter it doesn't look like a problem and I would just wash it with bleach and carry on. FWIW: I believe you would want to call an industrial hygenist to test the mold for its species. good luck

I don't think I can get the paper wallpaper backing/wallpaper paste to release from the paper coating of the faux wood paneling. They've essentially fused to become one. If I try to remove all of the paper, and clean it, I'm certain I will end up with badly damaged paneling. I really think the only options are paper over paper, or paper over paste. I just need help understanding which is best of these two options.