1) Cellouse is marvelously hydrgroscopic. It sucks up humidity like a
sponge. Wet cellouse is conductive. There's no reason to overthink
this. Also, don't assume the paper the manufacturers used was stored
or wound in perfectly dry conditions. That's nearly impossible. I have
no doubt caps made under humid conditions failed more quickly than
caps made during dry times.

2) Wax is NOT a perfect seal against moisture. I'm sure plastics are
better but they aren't perfect, either. Ever see a tupperware container
sweating from the inside? That moisture diffused it's way through the
polyethelyne in maybe a few days or even hours.

Paper caps from the old days that HAD to last a long time were sealed in
soldered metal cans in oil. Too expensive for consumer gear! The
engineers who designed this stuff KNEW the paper caps would be failing
in a few years. So what? Electronics changes fast and the buyer would
almost certainly buy something newer before deteriorating caps killed
the device.

Using good caps in consumer gear would be a waste of money. Cheap caps
were considered good enough.

As far as what kind of wax was used, some sources say beeswax, some say
microcrystalline wax. I don't much care.