There is the story of BX and how it got its name here someplace. I think there was an original AX that was replaced by a later B version- BX. It was the replacement for K&T. It has conductors wrapped with paper and covered with a spiral wound steel armor. The armor serves as the EGC. There were various versions of this design, such as the waterproof one that had the conductors covered in lead under the armor.
Conductors were tinned copper. The conductor insulation was always rubber and covered with fabric. (Type R) There was a time in the late 50's I recall, when they screwed around with the rubber compound causing the rubber to became brittle over time throughout the cable, but other than for that short time it was as Infinity says, "except where it was heat damaged the rest of the cable was as good as new". Shortly after, in the 60's, the type R was replaced with TW then THHN.
I don't remember when BX became AC, probably when TW was used for the conductors. Still, some people call any armored cable BX.
As far as the armor being dangerous because it's used as the EGC, if the steel armor corroded causing it to lose contact with adjacent spirals making the resistance of the EGC increase and there was a fault to ground, (and it would have to be because of a damaged cable because there were no grounding receptacles at the time) it's possible that the breaker or fuse wouldn't trip. There were even a few reports of the armor glowing red. But I submit that the cable would have to be of considerable length and damaged for that to happen. To help prevent that, starting in the mid 50's, about the time when grounded receptacles became required, #12 BX and up started having the aluminum strip under the armor that provided continuity from spiral to spiral. Then all #14 BX. Unfortunately, BX and AC and MCAP still all use the armor for the EGC, all rely on the box connectors for ECG connections and continuity. Loose or damaged connectors, even not removing the paint sometimes when installing connectors can render the EGC useless.
The solution is MC cable with its separate insulated green EGC but that has some disfavor because, God forbid, you have to deal with the additional EGC conductor and metallic boxes. Of course, there is garbage NM that at least has a separate although bare EGC. But then you deal with all the other issues such as it being easily damaged and the bare EGC having to connect to the ground screws of all devices and possibly contacting the neutral or hot screws.
As far as I'm concerned, I would feel safer with a BX or AC wiring system in good shape than a lot of the NM I've seen.
-Hal
