Chewed-through ground-fault cord
I would assume the braid is just for strength.  Ground fault relies on detecting current leaks between hot and neutral.

However, if the existing plug is a GFCI plug, then it is advisable to replace it with a comparable part.  Alternatively, you could replace the outlet with a GFCI outlet, or even a GFCI breaker. This would provide the same level of protection with a standard plug.