The biggest use of Azodicarbonamide is the industrial purpose of being a blowing agent for foamed plastics. Blowing agents take a liquid and give it cellular structure. Think of vinyl PVC.
As a food additive ( which is why you are here ), it is used as a flour bleaching agent and dough conditioner. When it touches moist flour it acts as an oxidizing agent creating biurea, which is a derivative of urea, and makes everything stable during baking.
That’s right I said urea, the main nitrogen carrier in urine.
If you’re in Australia and the European Union, you won’t encounter it because it isn’t approved as a food additive. It used to be used at Subway and Wendy’s until the hysteria reached a crescendo over its use and both chains halted its use and other chains such as McDonalds and Burger King halted as well.
Is it really unsafe? The FDA marks it as “generally recognized as safe” for what that’s worth ( up to 45 PPM ). The Center for Science in the Public Interest however states that Azodicarbonamide has been “poorly tested” and says you should probably steer clear.