It sure looks like water damage, and maybe just condensation from there being no air-gap with that sisalation. Moisture has been getting in there and not able to get away. But from just those two pictures the timber itself looks reasonably sound? If the studs do have rot then you will be able to push a finger nail into the timber or a screwdriver, quite easily. But . . . they look a lot like termite tracks too so I would be doing a very thorough pest inspection!
Advice from me on this forum is general and for guidance based on information given by the member posing the question. Not to be used in place of professional advice from people appropriately qualified in the relevant field. All structural work must be approved and constructed to the BCA or other relevant standards by suitably licensed persons. The person doing the work and reading my advice accepts responsibility for ensuring the work done accords with the applicable law.