Knob and tube was designed and installed when codes were more conservative. Generally the workmanship is superb - the electician knew how to splice and solder and tape properly. I've inspected the K&T in my attic and it all looks great. Insulation is not brittle or crumbling; no sign of overheating. Some of it has been replaced with entirely new circuits to the remodeled areas of the home. But what remains is in great shape. A problem comes when homeowners or unlicensed electricians try to splice into existing K&T to add more circuits. Either the connections are bad or the original K&T is overloaded. The proper way to add new circuits is to put a new breaker in the panel and run Romex (or armored cable, or wire in conduit) to the new locations. Another problem area is the dual wire pre-Romex that is actually wrapped with a rubber compound and fabric. The rubber tends to dry out and crumble with age. If disturbed, you can wind up with a neutral and a hot wire getting bared in very close proximity, perhaps contacting each other. This stuff should be replaced with Romex - providing the splicing into the old K&T that feeds it is done properly (as in a distribution box). My understanding is that the flying splices traditionally used in K&T are no longer allowed on new wiring.

The flammability of the insulation isn't so much of a concern as I stated in my quote from the NEC in the beginning of this long dead thread that you chose to revive. The conductors (and their insulation) of K&T wire requires free space to dissipate heat and it matters not how FIREPROOF the insulation. As pointed out California gives specific and limited exemption to the NEC requirements (The California Code with small exception incorporates the entire NEC). In California alone, after certifying your K&T wire is intact, free of splices, and otherwise in good condition, you can encase it with fireproof insulation as long as you go through the additional hoops to mark it. As observed, to make that sort of determination probably requires opening the walls anyhow, so you're in the point of why not rewire anyhow (and possibly do a better insulation job that most blown in jobs are anyhow). Here is the CALIFORNIA EXCEPTION explained (alas the formatting is scrogged by the fact that Houzz provides a deficient formatting code than the old thathomesite/thegardenweb interface did): 324-4. Uses Not Permitted. Concealed knob-and-tube wiring shall not be used, in commercial garages, theaters and similar locations, motion picture studios, hazardous (classified) locations or in the hollow spaces or walls, ceilings and attics when such spaces are insulated by loose, rolled, or foamed in place insulating material [UL]that envelops the conductors.[/UL] Note: Underscored words NOT ADOPTED by State of California. Exception: This article is not intended to prohibit the installation of insulation where knob-and-tube wiring is present, provided the following are complied with: (1) The wiring shall be surveyed by an electrical contractor licensed by the State of California. Certification shall be provided by the electrical contractor that the existing wiring is in good condition with no evidence of deterioration or improper over-current protection, and no improper connections or splices. Repairs, alterations or extensions to the electrical system will require permits and inspections by the authority having jurisdiction for the enforcement of this code. (2) The certification form shall be filed with the authority having jurisdiction for the enforcement of this code and a copy furnished to the property owner. (3) All accessible areas in the building where insulation has been installed around knob-and-tube wiring shall be posted with a notice, clearly visible, stating that caution is required when entering these areas. (4) The insulation shall be noncombustible as defined by Section 415(b) of Part 2 of this Title. (5) The insulation shall not have any electrical conductive material as part of or supporting the insulation material. (6) Nothing in this exception will prohibit the authority, having jurisdiction for the enforcement of this code, from requiring permits and inspections for the installation of thermal insulation.

If the wire is a tap to feed an outlet, no. Even in knob & tube taps ended in boxes. The K&T branch circuit can end in 'space' (and they often did) at a knob (round porcelain fixture with a nail through the center. K&T was insulated, but the old rubber insulation is very often dried out and brittle, especially if the copper wires are old enough to not be solder dipped (AKA 'lead plated'). The rubber reacts with the copper to harden and shrink. Solder dipping the wires before applying the rubber was the 'fix' for that particular problem, and even persisted into early AC wire to keep the rubber insulation separated from the copper wire.

Multiwire in code terminology is where there are two hot legs and a neutral fed from a double breaker (or two singles, but that isn't good) so that the hots are on opposite hot legs. That makes 120 volts from either hot to neutral but 240 between hots. In modern practice it is common for a dishwasher and garbage disposal to be fed that way, and there are other uses. (There's also a 3-phase version but we don't need to get into that in residential practice) Because the hots are on opposite legs the two loads have currents that are out of phase and cancel each other out to some extent. The neutral current is never more than one of the hot wire currents. So it lets you do something with 12-3 that would otherwise require more wires. Multiwire was probably not common in the K&T era. By cross-wired, I meant that someone might have not been careful about keeping the neutrals for various circuits separate and associated with a single hot. It might have saved wire to run the hot to a light switch, then to a light, and then the neutral to some other circuit that happened to be near the light. This will look like a fault to a GFCI or that portion of an AFCI.