Adding nutrients in the form of yeast extracts or peptone to your fermentation medium generally stimulates the performance of the fermentation process. However, there are microbial production processes that become less productive in such a nutrient-rich environment.
The presence of high concentrations of specific nutrients can inhibit specific metabolic pathways that are crucial in the production of your product of interest, resulting in a lower fermentation performance. This is especially the case for metabolites formed as part of micro-organisms secondary metabolism, like antibiotics or non-GMO enzymes. The use of inactive yeast instead of yeast extract as a nutrient source can overcome this problem.
The nutrients present in the inactive yeast cells will slowly release from the whole cells during the fermentation process. Consequently, by using inactive yeast, you still provide the additional nutrients required for your fermentation, but avoid inhibition of key metabolic pathways by having concentration levels of certain nutrients too high during the fermentation process.