Why studio walls are covered with bumpy foam?

Contrary to popular belief, these 'sound tiles' DO NOT sound proof the room. They DO NOT prevent sound from traveling through the walls to other rooms (you need MASS to do that ie: sand filled walls, RC Channels, Quietrock, multi layers and multi thickness drywall).

The foam simply reduces the amount of reflections within a room, preventing flutter echos and other type of reverberation.

Keep in mind that the small bumps are only affecting the upper frequency range of the sound. To treat the lower-end reflections, you'll need to install bass traps.