Is iodized salt unsuitable for baking bread?
TL;DR: yes, use it.

Many folks out there (my sweetie among them, so I hope she doesn't read this) claim to be able to detect an aftertaste of iodine in baked goods made with iodized salt.  This is the primary reason we have non-iodized salt in the kitchen.

The reason this is highly unlikely is that salt is generally only between 1-2% of the mass of baked goods, and iodine is only 0.0045% of the mass of the salt.  Which means that to taste the iodine from iodized salt, you would need to taste something that's present in only 0.05 parts per million (PPM) of the raw baked goods. For comparison, the Scoville Scale is also a dilution scale, and only pure capsaicin is detectable at that level of dilution.  So it's pretty unlikely that you could tasting the iodine in the finished baked goods.

There's also the idea that the iodine could vaporize during baking and somehow affect the other ingredients.  This is equally unlikely; even at 350C only 20% of the iodine vaporizes, and almost none at standard baking temperatures like 180C. And again, how much effect could 0.05ppm of iodine have?

You can work through similar exercises, but the simple truth is that iodine is present in such minute quantities that it's highly unlikely to have any adverse effects on baked goods.