I should have looked this up earlier.
A simple introduction is Condensation in aircraft
(Dang, can’t cut and paste).
There is nowhere as dry as first class in an aircraft, not even a desert. Relative humidity there, typically 5%, can be as low as 2%.
But people exhale moisture, and on a wide-bodied aircraft typically 500 kg, sometimes as much as a ton, of water can end up in the insulation blankets because the outer skin is so cold.
This can cause what is known as “rain in the plane”. During take-off in humid climates and landing, water running from overhead lockers can rain down on unsuspecting passengers.
Secondly, it can trigger short circuits.
Thirdly, it causes corrosion.
Fourthly, it reduces the effectiveness of insulation, thermally and in damping noise, and the insulation blanket can become a breeding ground for microorganisms.
More airlines are installing dryers to take water out of the insulation.