I’m with Lennie on this. It decreases that surface tension and prevents foam from forming. If you drop it in the kettle as the foam is just beginning to form you can see it working.
I also don’t use it in the fermenter only in the kettle. Since I have read things about it needing to be be filtered, I also have significantly decreased the amount I use. I find that about 1 drop per 2 gallons in the fermenter is enough to keep the head to a minimum.
I also have not seen any decrease in head formation in the finished beer but the head will drop immediately if you put a drop of this in a finished beer. The fact that it is recommended to filter tells me that the compound is not “used up” or else it would not filter out.