Damaged Conductor Mystery Advice Needed

I finished the rough electrical on a remodel of mine a few months ago. I had a 14-2 romex whip coming out of the stucco through a beam that is going to get a surface mounted exterior light. I was looking at it today and noticed that it looks like someone ripped the jacket back to about 4" out of the stucco and I can see where they tried to cut it to the wall but did not succeed. It also has some stains on it like from a rusty knife, or ??? Also the neutral was completely cut off back to where the jacket was ripped, (4" out of the wall) and the hot has a wire nut on it. The paper was falling off the neutral leaving it oxidized back to the jacket. Wierd.
So the question is ... can I use a ground that has been oxidized or is there something I can remove the oxidation with? Secondly, if the wiring looks intact, I can pigtail onto the neutral and call it a day, unless I want to open the wall and splice onto the run and bring a new run out. I understand that AMP now makes a product that allows a splice to be hidden in a wall. Has anyone used this product and is it safe?
Can anyone make sense of why someone would do this? Lets play clue!!!
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