Specifically it makes chloramine gas, the same stuff that (in fairly low concentrations) makes swimming pools stink. It can be lethal so definitely take it seriously, although it's not nearly so gnarly as real mustard gas.

Here's an incident where a woman inadvertently made chloramine gas in an enclosed space while cleaning and was breathing it for 30 minutes. It nearly killed her and she was hospitalized for a week: https://www.nejm.org/doi/full/10.1056/NEJM199909093411115