How to deal with obstruction when insulating pipes?
In this area, 95% likely the basement is conditioned.
While I applaud the goal to insulate the pipes, the reality is that they are not costing that much in lost efficiency. For 1/2 the season (heating season) they are helping condition the space.
I would not leave just the jacket on the insulation if it is PVC jacketed. The fiberglass is what is providing the thermal resistance in this case and PVC against a hot pipe is never a good idea.
I would not be too concerned about the lack of insulation in a few spots.
There is much more potential in the home with the repairs on other items (air sealing the attic, bands, etc).
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