Hello Christian, We're building a pair of 1982 GS1100E to vintage race. What you are looking at there is the cover for the drive sprocket. On our race motorbikes we leave that (because it's so heavy) off entirely. It is replaced with a support for the splined shift rod and a thin aluminum plate to protect the electrics. I believe that all that insulation is only to keep down some of the noise caused by the chain and sprocket. That whole area get inundated with chain lubrication over the years and the insulation just drys out and becomes brittle. If it were me I'd either just clean it up and put it back on or try some of that quick drying rubber that you see on TV and just patch it. Should cause you no trouble one way or the other. You may also find a replacement fairly cheap on line. I have some from our racers that I have chucked in the bin so they're not a hot commodity. Cheers