With my DS1 we stopped wrapping at around 4 months. He was fine... Well, he was a crap sleeper before that and unwrapping him didn't change it!!!

It would definitely be the startle reflex but also probably exploring her environment. Her face is so exciting!

You'll know when she's ready to be unwrapped. At the moment if it's working then go with it. Some people do wrap for extended periods. You just need to work out what works for you and your daughter and go with the flow. When you do make the change it probably won't be that bad. I find I get anxious about changes and then my children surprise me by being totally fine.