Bloodhound is Chorizo's second Amigo ability: he sniffs out nearby crafting materials and loot and tags them for you. It turns him into a handy scavenging partner between fights.
With Bloodhound unlocked, Chorizo marks crates and other material sources around you. You can see them through walls and grab them on the way past. It is passive, so you get the benefit just by having him out.
Yes, if you are short on upgrade materials for weapons and Resolver gear. It costs nothing to keep running and it speeds up looting outposts after you take them.