It increases the mutation rate and the rate is multiplicative; i.e. uranium is 10 times the original chance so 2 uraniums = 100% chance of mutation, nether star is 100% chance, and enderpearl is 4 times so 3 enderpearls (with 3 mutator blocks ) has 64x chance or 100% chance of mutation.
It's bugged if you leave the game/go to other dimension (at least in SSP), and only happen to XBee alveary blocks, forestry alveary blocks aren't. You need to break 1 of the block and place it back, but be careful that you will lose the item inside it (frame or uranium) if you break the mutator/frame housing block before removing them.
I haven't tried to put more than 1 uranium per mutator block (and see if it's bugged or not), but at least frame housing are not bugged and you can automate it using a router+machine filter upgrade.