I'm not sure if it does. I've used it in coffee, tea, in hot cereal, on cold cereal, small amounts in home made spaghetti sauce, with no ill effects. However, I've not used it as a major ingredient, such as in the lemon curd recipe I posted earlier this morning. A friend uses it quite a bit, although I've nevr talked with her about her specific uses, and she's never mentioned a problem.
There have been a couple of sugar-free chocolate bars (non-Xylitol) that have given me me a trip to the john, but nothing serious, and only when I've eaten too much of the chocolate.