To preface this I'm in the Northeast and have always had great success with Basil growing in my garden. I planted two weeks ago two basil plants, they came in those biodegradable soil pots that say you should plant the whole thing in the ground. I did this and now the plants are wilting and not looking good. It isn't a bug or anything getting to them that I can see. The one thing I think it might be is the soil/biodegradable pot they came in not letting the water drain into the surrounding soil. The reason I think this is the rest of the garden will be dry and the area where the basil is within the pot is still very moist. Could the basil be over saturated with water? Has anyone had similar experience with those types of plants/pots. Do you remove from the soil pot or just plant it in the ground?
I'd try pulling the plants up, removing the pots and seeing if they improve. Things will either improve or you'll need to get new basil plants anyway.
Make sure the plants are getting enough sun, basil likes to be planted near tomatoes, and give them some well drained soil.
Basil starts aren't horribly expensive, so they may be a wash.
I have had the same problem with the pots, the water does not drain correctly. The roots need to breath and grow, the pot seems to restrict that process.
I have found that sometimes roots are not stong enough to break through those pots - I usually cut through them in several places before planting or remove entirely- if you roots are grown into the material already I would break it up but not remove it to cause damage to roots.
I also bought those 2 or 3 weeks ago (as well as in the past) from Home Depot. The instructions on mine say to gently tear away the bottom and lower sides of the pot, which I do. It is suggested that you tear up the pieces of pot (presumably they have a lot of plant nutrients) and mix them with the soil.
My plants are doing very well, but I can see that some of those torn up pieces of the pot have not yet disintegrated.