This Austin, MN home had been flooded by outside water the safest thing to do is remove the wet material. Flood water can carry bacteria which is why SERVPRO recommends removing the material at least 12 inches from where the flood line is located.
The first picture shows how the water had wicked up in some places higher than others. It is for that reason that the wall has been cut at around 4 feet instead of just 12 inches. Also, drywall comes in 4 foot pieces making the rebuild easier.
Unfortunately this home had all the walls cut along with the carpet and pad.