Sids research is hard to find anything truly conclusive, but the general thought is that the infant gets trapped in a pocket of poorly ventilated CO2. Without enough ability to move out of it, it can be deadly.
When cosleeping, you end up with a lot of linens around the infant that can limit airflow. The parent exhaling will also be larger pockets of CO2 compared to what the baby is trying to draw in, essentially flooding them with CO2.
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