Hi
@mollylama! Yes, the problem with the peeling wrapper is that it
may expose the negative terminal of the battery (which is basically the entire battery "can") to metal inside the
mod. Doing so can cause a short circuit condition, and that's a bad thing.
Pick yourself up a package of these:
18650 PVC Wrap
and re-wrap the suspect cells. Just cut the old wrapper off, slide the new one in place, and use a hair dryer to shrink it to the battery.
In a pinch, you can wrap a little piece of electrical tape over the cracked area, but replacement would be the best option.