All plants have mechanisms of defense against herbivore predators. Some, like tobacco, tomato, potato, produce alkaloids. Since plant vs. herbivore predator is an arms race, some of those predators have acquired mechanisms to defeat the plant defenses.
In tobacco hornworms, their gut contains a bacterium that has the ability to detoxify the alkaloids (nicotine, anabasine, etc.), so the hornworm can eat tobacco leaf without being poisoned. BT is a suspension of a live bacillus that eats those hornworm gut bacteria. So in the presence of BT, hornworms can't detoxify the alkaloids, and the alkaloid poisons kill them. BT is not poison--it's just another organism, and is harmless to creatures that do not harbor bacteria to detoxify alkaloids.
It's possible, with extremely high concentrations of alkaloids, to exceed the ability of hornworms to detoxify it, but high nicotine concentrations are also poisonous to any organisms with a nervous system (people, bees, birds, earthworms, pets, fish).
Bob