Good to see this getting fixed. Speaking theoretically I'd think that an insert with a convection jacket and a stainless liner would make this situation safer.
There is no data to back that up at all. Modifying an unsafe install in an untested and un approved way is not the way to fix it. Internal temps in those open fireplaces are really pretty low because of the massive ammout of air moving through them. When you put an insert in there you stop the air movement and burn much much longer. This could potentially lead to more heat transfer through the unit. Why do you insist on advocating for this type of install? There are just way to many variables and none of them have been properly tested in most cases.
The walls of a fireplace are pretty cool when compared to the walls of a stove. Because of the ammout of dilution air. Why do you think they can get away with such low clearance with so little insulation and sheilding. And a lower temp chimney. I have never claimed it was unsafe. Just untested and unapproved. That means we dont know if it is safe. And it absolutly does not meet code.
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