Your understanding is correct. Not only is there virtually no insulation value in stuffing in fg, it invites mould growth. The only time I stuff in bits of fg between framing is for temporary sealing during construction heating.

Another company had said that was from unconditioned air leaking up through the uninsulated rim joists.

Correct. Again.

I had R-19 stuffed in mine and it seemed to do nothing. I pulled it all out and put 2" foam insulation in with 1/2" gap all the way around and foamed in place... huge difference because I also sealed a lot of leaks in the process.

Maybe putting the fiberglass in well-sealed plastic bags would be better than what you have.

The county administrator in charge of the weatherization program took my request for foam insulation in the rim joists to the state rep for the program.

The state rep said he would never authorize foam in this installation because it would create toxic gases if it were to burn in a fire. This makes no sense to me since it's home insulation, just in a different form. The only thing I can figure out is that he thinks it's styrofoam.

Any sources I could point them to online?

Thanks,
Bert

Sorry, the rep is correct.

Most insulating foams must be covered by a fire resistant covering, typically 1/2" drywall. Other alternatives are fireproof intumescent paint, metal sheeting and sprayed plaster and sprayed mineral fibre An exception would be cementitious cement spray foam.

There are also fire-rated expanding caulks and foams used for sealing around plumbing and wiring penetrations. The economics of using them in larger amounts would depend on the job and alternatives.

Thanks, Worthy.

What would you suggest my next move should be? You mention alternatives??

Should I keep the fiberglass in there?

Bert

I have the foam boards in there and I pushed my fg bats on top of that...guess thats likely not code compliant either! In one area I did glue 1/2" drywall over the foam board...thats a lot of work though!

I'd take the fg out. It's just an invitation for mould. The cheapest diy way to well seal the rime joist area would be to use expanding foam or caulk followed by expanded or extruded polystyrene followed by 1/2" drywall. No special skills required. Just patience. Which, come to think of it, is probably a skill in itself!

If you don't cover the foam with any of the approved materials, you take the risk of deadly fumes in a fire. I'm sure there are hundreds of thousands (maybe millions) of homeowners doing that. In a home I was building a few years back, a plumber accidentally set aflame just a tiny section of high-density spray foam, barely an inch circumference. Everyone working in the house fled the absolutely sickening and toxic fumes.

As mentioned above if you just want to close the sill gaps, you can use the fireproof caulks. But if you're eventually covering them with drywall, any good caulk will do.

For fireproof caulks, you'll have to hunt up a commercial building supplier. Or try the net. At least, I've not seen them in the Big Boxes near me. (See link for example.)

Here is a link that might be useful: Fireproofing Caulks & Sealants