The detached garage for my home was built by the previous owner in 2000, the garage interior is naked particle board directly on wood studs, and the insulation has paper backing (not foil). When using the electrical sensor on the Stanley 77-110 stud sensor, most of an entire wall surface shows current (other walls do not). When I turn off the breaker for the outlets, the current disappears. How do stud sensors actually sense current, and should I be concerned?
How do stud sensors actually sense current,
Basic stud sensors are designed to detect the edges of wooden studs, they are not designed to detect live electric wiring in the wall. Electronic stud detectors are sensing changes in the dielectric constant of the wall.
Some stud sensors also incorporate a separate type of detector for detecting live electrical wiring.
These electricity detectors don't sense current at all. What they sense is voltage alternating at 50 or 60 cycles a second. There are separate devices for sensing current. This distinction is important because an alternating voltage of 110 (or 230) volts is detectable (and potentially dangerous) even if there is currently no detectable current.
non-contact voltage (NCV) detectors generally sense alternating voltage (an alternating electric field) using capacitive coupling. Which means they are very dependent on operating conditions.
Fluke have a description that you may find helpful.
and should I be concerned?
No, false or non-localised detection is a common problem with this type of detector. You may be able to get a more useful indication by following the calibration instructions for the device, by adjusting the sensitivity control (where present), by being careful where you place your free hand or by adjusting the distance of the device from the surface of the wall.
They sense the electromagnetic field of the conductors.
They are a first line item and not to be relied upon for accurate measuring. Electricians use them just to let us know if there is power in a junction box or conduit. From there if we want more accurate information we use a regular voltage tester.
They will occasionally tell you there is power on a wire when it is another wire within the same conduit that actually has power on it.