Breathing in stuff (like big particles) is generally not very good for you. It of course all depends on the stuff - for example if you are just using water to increase humidity, that's fine. But if you use anything smelly, it will affect your throat and lungs.

Maybe you meant air purifier? That's opposite of air diffuser :)

Other person mentioned already, but a lot of products that claim to be beneficial (or just suggest it) aren’t really, such as “essential” oils.

People with asthma can be triggered by them (due to the VOCs they release) which (imo) means even healthy people should probably avoid. Source: American Academy of Allergy, Asthma, and Immunology. https://www.aaaai.org/Allergist-Resources/Ask-the-Expert/Answers/Old-Ask-the-Experts/oil-diffusers-asthma