Framing basement bathroom: original builder didn't account for wall wrap when laying bathroom drains?
Is there a reason why you need a 3-1/2&quot; thick wall? If not, the studs could be rotated so the rough wall adds only 1-1/2&quot; in front of the insulation/wrap. It seems that would make all the other problems melt away.
You'd have to figure out what to do about top and bottom plates. You could rip a 2x4 in half and try to nail the studs to that, but it's prone to splitting. Another option is to position the bottom plate like normal, but cut or lift the wall wrap so that the bottom plate can be pressed against the concrete wall. The wall wrap would effectively be recessed inside the wall. The top plate might be done similarly, but it's also possible that this interior wall will be taller than the concrete wall such that there's no real conflict between concrete, wrap, and top plate.
Local codes might require additional insulation be added when the space is finished out. Generally it's allowable to use layers of different types of insulation so long as the total meets the R-value requirement, so if the wrap is left in place, its R-value contributes to the total. You'll probably find that the 1-1/2&quot; cavity is thick enough to allow whatever additional insulation might be required.
Insulation doesn't perform as advertised when compressed, so if you prefer fiberglass batts, you might consider buying 3-1/2&quot; thick batts and separating them to half-thickness for this job.