I don't really care if there is malware running in my living room. Makes no difference to me if it runs there or at the north pole. It isn't exactly wasting much of my power or network with a tiny allwinner CPU and probably only 54Mbit WiFi.
And as long as this thing keeps steaming TV, I'm quite happy for it to be full of malware.
Harboring such a pest, typically used in extortion, is just not nice, even if you personally do not directly feel any ill effects.
A lot of those "residential proxy services" work by routing traffic through infected devices. The operators of them just buy "installs" (dirt cheap) from botnet operators, etc.
An infected device on the home network can also be staging for (automated) attacks against other shit on your network. Fun times.
Oh? With what result at the end of all that?
Otherwise this reads like typical "infosec" fearmongering turned up to 11. No different than doomsday preppers.
This all gets bought and sold on black markets, and gets used weeks and months after being stolen. Spam sent covertly from your mail account, mystery charges on your CC, etc. Not pleasant. At the worst case, a full identity theft, then behold a $30k loan taken in your name, for you to repay with interest.
What if a super-volcano erupts tomorrow, do you have enough canned beans?
An Internet connected fishtank thermometer was the initial point of entry for attackers against a casino:
https://www.businessinsider.com/hackers-stole-a-casinos-data...
Without paywall: https://archive.ph/K1nPe
Using your accounts presumably - so at the very least this thing has access to your hulu/netfliux/hbo/disney+ account information... That alone should be enough to make one reconsider.
Q: What this malware does?
A: probably nothing , but You kind of gave keys to Your device to 3rd party. And 2nd party (that also has keys ) doesn't like that.
Ideally You the owner should have the key and nobody else.