Both....
I mixed some in a bowl and let it dry. Then I filled the bowl with water on top of the hard hide glue. It never did dissolve.
I sinewed the bow and let it dry good. Then I applied the potash/glue as a finish and kept it in the dark for a few days to dry good. After it was dry I put it in the light. Formaldehyde is not super dangerous as long as you don't try to drink it.
You can mix it in the glue then make darn sure your project doesn't get dry or cool. The other way is formaldehyde vapor on the finished project. Put it in a hot box with the heat on and a small container in the box. As it evaporates it permeates the hide glue and hardens it. Like I said, these chemicals are found in most campsites only in less dangerous forms. Ask yourself how Natives waterproofed buckskin and what it was that made it waterproof. Do a little research on bichromate of potash or chromate of potash. Potash is simple enough. The chemistry of chromate and bichromate hold a little more secret but you will discover a less dangerous form, not exactly the same but close enough, exists within reach of you at all times. Ill do a buildalong on a bow I have started that will shed a little more light on it, but I want some people to do some thinking like I did before I just tell all the answears. It took me months to figure out what (I think) the natives used, but I am convinced they had the knowledge.
Justin
