Why do airlines still mislay 25M bags a year?

In any case, the situation is overall vastly better than when I was doing business travels all the time in the nineties. My suitcase would be missing at least 25% of the time. On some flights it was a certainty that it would be missing. Now it's pretty rare. Even on very short transfers due to delays. I've on a few occasions literally walked out one gate an run directly to another to catch the flight, and surprise, the case made it every time. Brought directly from one plane to another no doubt.

Depends on the airline. Some (Southwest, iirc) don't scan the bags at all after check-in unless they find a stray bag somewhere in the system. They'll notice and scan your bag eventually it's misrouted or misses a connection, but it takes time.

Some others scan at every handling point and can be more proactive in reaching out if the computer notices a problem. But this increases the cost of bagging handling operations for the airline.

Same reason their staff can be abrupt and downright rude with impunity. If you don't buy a seat, then someone else will.

Even the most opportunist thief probably doesn't want someone elses old clothes and half empty tins of hair product.

Even worse if it's a return flight - that means the clothes are dirty!

Same reason why theft from tents on campsites is not (in my experience) so prevalent. Tents are vulnerable to burglary but most of the potential burglars are other campers and are therefore also vulnerable.

The laissez faire baggage claim is refreshingly delightful in contrast to the hell that every other aspect of air travel has become though.

It is also not uncommon in places where petty theft is high for you to have to show your baggage receipt matches the baggage tag before you can take it from the baggage handling area.

I suspect it's risk based. If they have reason to suspect there's ongoing theft, then they add additional layers of security.

Outside of that... theft would be extremely risky. There's a good chance the owner is already at the carousel somewhere watching their bag come out, and there's cameras everywhere.

You're in line at the boarding gate, ready to get on the plane. You checked your bag before going through security, so you're happy you don't have to lug it around, lift the heavy monster up, and try to cram it into a small overhead-bin on the plane. However, you notice the gate next to you is boarding as well. Between your flight and the other, one checked bag will go missing. Do you feel lucky?

That said I was standing a number of times dumbfunded at the carousel after all bags were distributed.

Usually it was due to having been sent with an earlier flight, have fallen down (probably) on the way to the carousel, to then be delivered to my place of stay (arriving earlier than me) or something around those lines.

Really "lost" only happened once, which was on a BA flight connecting in Heathrow (of course). It was delivered the next day and sent from the airport by taxi.

Still, it sucks if you're part of a statistic and your luggage really gets lost. And it does happen.

So after 100 flights, your chances of never having had an issue with your bags is 0.994^100 = 0.547 aka coin toss.