What does 'set breadcrumb' do in Rules?
To use the "Set breadcrumb" rules action you should add it to the event "Content is viewed", for example


Event: Content is viewed
Condition: Content is of type article
Action: Set breadcrumb: Title: Articles\n[node:title] Paths: articles\n[node:url]


rules_action_breadcrumb_set basically goes through those title and path values and uses drupal_set_breadcrumb to set the breadcrumb.