How does kidney disease actually affect the immune system?

Lowers immunity : Kidney diseases usually lowers someone's immunity as evidenced by the high risk of these patients to develop infections ( pneumonia, urine infection etc) and their lack to respond appropriately to vaccinations ( hepatitis ....).

Immune function: You can have increased immune susceptibility but the body usually compensates over the long term to make up for this loss. And often times it could be the immunosuppressant medications that make you more susceptible to infection.