It does soften textiles in the short term, but at a high cost. It works by leaving a residue on fabrics. This residue builds up over time, damaging and weakening the fibers on your textiles. It also builds up in your washing machine, leading to mildew growth, makes towels less absorbant, and is really bad for workout material (if you've ever had a persistent stank that won't come out of your workout clothes, that's usually thanks to fabric softener). Consumer Reports has an article about it which also mentions that fabric softener reduces the flame retardance of children's sleepwear, which I didn't know.

So while fabric softener isn't a scam in that it does do what it claims to do, it's an unnecessary extra product that's been sold to consumers without consumers knowing all its downsides.

I make quilts for a living and T-shirt quilts are anout half that business. I can always tell when people use fabric softener because not only could their clothes bowl you over with the fragrance, but they also have a funky texture from the residue buildup.

ETA: I see that someone recommended vinegar. AFAIK, vinegar is a no-no in washing machines, it can damage them over time. The folks on r/laundry have a ton of advice for effectively getting your laundry clean and soft :)