Nothing. It holds moisture. Moisture causes rust. It was an option on my year anyway.
It does if you spray it over dirt because the dirt will encapsulate the moisture like a sponge. That's why Rusty Jones and similar after-thought undercoatings never worked and, sometimes, even promoted rusting because they were sprayed OVER dirt, not paint.
If it is sprayed on over fresh paint there's no sponge-like dirt between it and the metal.
My GTX was factory undercoated (I ordered it that way) and I drove it all year long and that includes salty winters in Massachusetts from '68 to '72 and the undercoated parts never rusted. There was, however, surface rust on the sections that weren't undercoated.
Not all of the underside was undercoated.
Some portions were, intentionally, taped up to prevent undercoating from being applied. Driveshaft tunnels and areas where parts would bolted on further down the line are some of the locations.
The only places that were heavily undercoated were those that could be reached from the proximity of the rocker panels by the painters standing on the paint line as the painted body passed overhead on the conveyor. The inside edges of the sub-frames, for instance, weren't undercoated but undercoat over-spray was often found on the lower portions of the firewall and radiator core support.
When I repainted the car I used a shutz gun and sprayed shutz back onto the fresh paint just like the factory did.
