Part 1: Introduction to Bt toxin
The Bt toxin is a crystal protein which has insecticidal properties.
Part 2: Reason for inactivity of Bt toxin in Bacillus thuringiensis
Bt toxin exists as pro-toxin (inactive) in the Bacillus thuringiensis. It gets activated on exposure to the alkaline pH in the gut of the insects.
Because of its inactive form in the Bacillus, it does not kill the bacteria.