I understand that sharing video, photos, documents etc. is relatively safe because the data is not executed in the processor as instructions. How come people are willing to download and install pirated software though? How can one be confident that it does not contain malicious addons? Are people just don't know the risks? Or are there protection mechanisms that I am missing? I mean since the software is usually cracked there is not much use in comparing checksums with the originals, is it?
It's one of those high-risk, high-returns case scenarios. You gamble. If you succeed, you will be saving some buck. Some software licences can be very, very expensive.
There is no way of knowing the answer to your questions. You just use your intuition and take a leap of faith.