First it is a fundamentally improper approach to ask “what is its purpose”. The nitrogen in the atmosphere was not put there by a mind with intent therefore there can be no “purpose” to its existence. It is there simply because it is. That said one of the notable uses of atmospheric nitrogen is bacteria forming things like ammonia, nitrates, and nitrites in the nitrogen cycle. Without it most life wouldn’t exist.
If all nitrogen was simply removed then about 78% of the atmosphere would be gone. Atmospheric pressure is due to the weight of all the gasses being pulled by gravity, so the remaining mostly oxygen atmosphere would be extremely low pressure. This would result in the death of most life as it is adapted to higher pressures.
If it was replaced by CO2 then all the animals would die in moments as CO2 is very poisonous. If it was replaced with oxygen then all animals would die because that high pressure nearly pure oxygen environment is very corrosive. Although if most people would die from organ failure or incineration from a global pure oxygen environment is up for debate.
Basically the answer is the death of everything with minor variations on how.
If you just took it away completely and had just 5 psi oxygen then animals could live (this is the atmosphere they used in early space missions), but the lower pressure world probably do crazy things to the climate and temperature.
If you replaced it with oxygen then everything would be insanely flammable (see the Apollo 1 disaster).
If you replaced it with CO2 all animals would die of CO2 poisoning (see the role of the CO2 scrubbers in Apollo 13), and potentially it would trap enough heat to turn Earth into more Venus-like conditions.
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