Tetrasodium EDTA is a water-soluble ingredient used as a chelating agent in cosmetics and personal care products because of its ability to sequester metal ions and allow them to remain in formulas but lose their ability to react with other ingredients. This ability allows it to not only soften water, but preserve formulas as well by improving its stability when it is exposed to air and prevent microbial growth (Wikipedia).
According to LotionCrafter.com, Tetrasodium EDTA works best in products containing alkaline metals, often found in soaps. It can prevent the potential defoaming action of hard ions, reduce soap scum and improve lather and foaming action.