Yep, maybe we have a quite different filtering need. In WW2 the air filters of the BMW/Zündapp sidecars had a filter that was not sufficient for russia. So the developed an oil bath air filter. That was sufficient.
So there are conditions where a K&N might not be sufficient. Then take a paper filter and change more often. And if you get into more severe conditions, a paper filter might not be good enough and you need special filtration systems.
the yellow stuff looks like something organic. And it looks like the old filter did not fit properly. As you suggested. I once had a K&N for a 3.0 Ducato. It did not really fit well, therefore I changed back to paper.
So whatever you do, dont install an air filter that does not fit snuggly. Even if it is a paper filter.