It freed slaves in states that where in rebellion. So basically it freed slaves that the Union had no control over. Thats where the "ineffective" idea comes from.

However as the Union captured land it freed the slaves on it. It also made it really hard for Europe to get in the game on the side of the Confederacy. The second being really important, the loss of foreign support shut down the confederacy's hope that the war would draw other powers in.

You have to look at it as such, The Fugitive Slave Act required the government to return slaves to their rightful owner. And as we know the Union did not consider the southern states a seperate country but instead a state that was in rebellion. So the law was in effect.

But what happens when the Union captures slaves during the war? Do they return the slaves? Benjamin Butler, a Union general, idea was to hold on to them as Contraband. Problem is if its contraband it accepts two things. 1 that slaves are property and 2 that its a war not a rebellion. With the Emancipation that was not an issue anymore.