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People try to save tons of ammo to funnel it through, but that's just wasting time.
Only real use is for Explosive builds to push Cannon Balls through for explosive ammo.
Exchange units are about 5:1 for the same ammo, but the real power is in exchanging crap you don't need for ammo you do - and the way that the game throws .38 and shotgun shells at you, it's an easy side hustle to help feed your fixer.
Also - it doesn't take or give cores and doesn't deal at all with ultracite ammo variants, so YMMV.
The selling rate is pretty good for some ammo types but bad for others. But the buying rate is bad for all types. If your source of ammo is buying from it, you'll be poor.
There is an ammo creator machine called ArmCo Ammo Construction Appliance that you can buy with gold bullion at the Crater Core with max reputation. It is also a mediocre source of ammo (good for some types but bad for others).
Your best source of ammo should be daily ops and The Pitt expeditions, where enemies drop contextual ammo. You go in and come out with (easily) 2x or even 3x of what you had before, if your build is done right so you can kill enemies with minimal ammo spent. For instance, I kill a trog superior with 5 rounds and it drops up to 32 rounds back to me; I can one-shot a fanatic and get 4-16 rounds back; you do the math. You can even farm ultracite ammo this way, which the above machines cannot produce.
I bought the two machines just to add "flavor" to my military BoS-themed camp.
The converter machine also has an unwieldy UI as others have mentioned.
Jokes aside, I do put up with it though as a place to get "free" flamer fuel or 40mm grenades at short notice. It isn't that bad for me. Being able to toss in ammo i don't have a use for and then convert it into the ammo i do use is great. Conversion rates are not great but it is ok if you were basically going to be tossing out the unneeded ammo anyway. This way you at least get some benefit.
As mentioned it doesn't give cores or any ultracite ammo versions, so not useful for everyone.
A good hack if you have tons of steel is to make railway spikes with all the ammo crafting perks, as they only use steel, to fill the machine and then get back the ammo you want. Only really useful if you have first sub due to the amounts needed to fill it though.