1983 TD broken material under front carpets?

After pulling up the front carpet pads up on my 1983 TD wagon, I found a layer of fractured/broken material between the carpet and the metal of the lower firewall. Outer material is hard and the inner layer is a black insulation/foam. I suppose since it's all broken and falling apart I have no choice but to remove it....I'm just wondering if this is normal on the TD, since I know my 240D has nothing like it, and what (if anything) it means that it has all broken apart?
Thanks!

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