A greater concern would be what exactly made it wet in the first place and what may have been carried in by the water. As far as whether it should be installed wet and allowed to dry in place - It doesn't appear that it should. Here is what Owens Corning says...
"A physical and visual inspection should be done to ensure the insulation is dry. If the insulation is wet, Owens Corning recommends that it be removed from the cavity space to ensure that the insulation and facing (if applicable) are completely dried. Drying time may vary depending on the wetness of the insulation, ambient air temperature and relative humidity.
In the case of dirty or contaminated water entering the product, there is only one answer - replace it! Whenever any foreign substance (dirt, mold spores or bacteria) comes in contact with the insulation, we advise you to remove and replace it. The moisture and foreign substance can support mold and mildew growth and even give off a musty odor. "