Water category sets the safety plan for a wet floor under the ANSI/IICRC S500 standard, 5th edition, 2021. Category 3 means grossly contaminated water that can contain harmful agents, such as sewage. Your restoration company confirms the category, then completes remediation before drying when the water is Category 2 or 3.
EPA says you cannot tell by looking whether vinyl tile, sheet backing, or adhesive contains asbestos. EPA recommends sampling by an accredited professional before work that disturbs it. Your restoration company raises that step before cutting older flooring.
Floor replacement questions go to Collierville code enforcement at (901) 457-2310, the number MLGW lists for the Town. Confirm with that office which floor repairs need a permit.