Why does "liquid glass" putty turn cloudy when deformed? What physical process is taking place to make it look cloudy? What's changing to make it turn back to clear over time?
While they seem pretty secretive about the exact composition, but I did find this MSDS. Section 3 mentions it contains "Silicone Polymer Contains: - Inert Fillers".

 A: Found this on a Amazon.com review

The product works exactly as described except for the long-span reaction, which is supposed to be a fluid-type reaction where it smoothes out and looks like a little droplet. It never really smoothes out, even after a week the quarter-sized glob I was testing held ridges and my fingerprint, although it did spread out pretty well. (That whole issue may be due to the added magnetic properties, which can reduce the liquid reaction state.)

Then here is a link (http://www.popularmechanics.com/technology/design/a21265/smart-glass-will-become-transparent-or-opaque-at-the-flick-of-a-switch/) about 'smart glass' which becomes opaque and transparent as needed.
Another article about smart glass
https://en.wikipedia.org/wiki/Smart_glass
A: I believe it is simply air entrained. Air will make putty look cloudy. Air very slowly bubbles out of the viscous fluid, returning (most) of its transparency. I suspect putty has some small yield strength, permanently trapping the tiniest bubbles and thus permanenty losing some of its like-new transparency.
