Chemical exfoliation of MoS$_2$ via Li-intercalation route has led to many desirable properties and spectacular applications due to the presence of a metastable state in addition to the stable H phase. However, the nature of the specific metastable phase formed, and its basic charge conduction properties have remained controversial. Using spatially resolved Raman spectroscopy (~1 micrometer resolution) and photoelectron spectroscopy (~120 nm resolution), we probe such chemically exfoliated MoS$_2$ samples in comparison to a mechanically exfoliated H phase sample and confirm that the dominant metastable state formed by this approach is a distorted T state with a small semiconducting gap. Investigating two such samples with different extents of Li residues present, we establish that Li+ ions, not only help to exfoliate MoS$_2$ into few layer samples, but also contribute to enhancing the relative stability of the metastable state as well as dope the system with electrons, giving rise to a lightly doped small bandgap system with the T structure, responsible for its spectacular properties.