The base material of the foam is non-conductive. It’s made slightly conductive one of two ways:

1) Conductive carbon particles are mixed through it. Not all of these actually touch each other and allow current to flow, just some. Stretch it and less touch, which causes more resistance. Compress it and more touch, which causes less resistance.

2) A conductive coating is applied (cheaper). The component that makes it conductive may vary, but the same principles apply when it comes to mechanical stress.

Yes, it works. And yes, it takes some clever calibration. Once a mechanical stress is removed, the resistance never returns to quite the same resistance as before. Repeated stresses result in a permanently higher resistance as the conductive properties break down, especially if coating-based. If you want to interpret the results as a digital result, you must dynamically adjust the threshold. Meaningful analog results are very difficult to obtain, and good accuracy is impossible.

Commercial (not homemade) conductive rubber suffers less from these issues, and is more repeatable/reliable. But it can’t be scavenged. You can still get it fairly cheap as electrodes meant to be applied to the skin for TENS/EMS stimulation, on Ebay for example, if you can work with the shapes available. Last time I checked, bulk sheets are more difficult to obtain, and more expensive. I got a 12″x12″ sheet years ago for $40 from a medical specialty supply (intended for making custom TENS electrodes). And they only sold to medical specialists, so I had to pretend to be a physical therapist. ;)