HVAC Pipes and venting

I just had my first inspection today and am looking for some advice on the oil heating systems pipes/ venting. The pipes have a white spackle like material over the piping insulation. I am assuming this is to seal asbestos insulation? Is this acceptable and should I mention it? Also it is vented into the chimney in the basement but I notice another pipe coming from the distribution pipes that vents upward into the attic and run into the chimney near the roof. Is this appropriate and what is the function?

Are you saying that single wall pipe came from the heat distribution system? That doesn’t make any sense, to send heat to the chimney like that.

Yes it is coming from the heat distribution… Could it be a steam pressure relief?

That would be a knew one on me, if that was the case.

Maybe the pipe traveled through the chimney to get to the upstairs for supply

Not sure if you are referring to a boiler or forced air heating system.
Either way the masonry chimney looks like the heating system exhaust is vented into it.
It shouldn’t be vented into the masonry chimney if there’s no clay liner. The rust on the venting and stained brick looks like there may not be.

Often a leak gets misdiagnosed and looks like its a roof issue and its an oil (or gas appliance) vented into an unlined chimney.

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You’ve got that right, Scott!