The entire US uses NFPA-211 as the safety standard for solid fuel burning. It requires a liner in any chimney, and has for many years.
Chimneys built for coal ran much cooler than wood. Coal may only have 150-200 flue temperature compared to wood requiring 500. Chimney fires are tested to 2100*f, hence why you are being told to definitely install a insulated liner.
The reason for stainless is water vapor from combustion needs to be kept over 250*f to the top before exiting. Below this temperature, water vapor condenses on flue walls allowing smoke particles to stick. This forms creosote. The insulated liner prevents creosote and high temperatures from the combustible material too close to the chimney.
Chimneys in contact with combustible material require 12 inches solid masonry from inner flue wall to combustible material contact. Interior chimneys require 2 inches air space of clearance to combustible material. Exterior chimneys require 1 inch.
Coal does not form creosote, so will not see temperatures of 2100*f during a creosote fueled fire. So they got away with chimneys like this for many years.
It is AFTER those many years that this becomes a problem. Combustible material that is exposed to elevated temperatures OVER TIME chemically changes to another material having a lower ignition temperature. This is pyrolysis. When the ignition point is lowered to the temperature it normally sees, it bursts into flame. That is why this needs to be brought up to the Standard that has been time tested.
Black pipe will not last long under those conditions.
If your neighbors burn wood with a single wall pipe, even inside a masonry chimney, it is air cooled. This drops the internal temperature below the condensing point forming creosote that needs to be removed constantly. If they are burning coal, that is safer, but coal is very corrosive and pinholes form quickly, requiring replacement frequently. There are different grades of stainless needed for coal burning that are more corrosion resistant.
