You obviously shouldn't install closed source or otherwise shady extensions from dodgy authors you don't know, but on the whole there is very little they can do that you should worry about.

Sorry if I'm nitpicky or confused here. You just said it's obvious that you shouldn't install closed sourced or otherwise shady extensions. Do you think a normie knows and cares if an extension is open source? And how do they know if an extension is "shady"? And what about legit extensions that get bought by shady people and turned into shady ones long after they've been installed and the user base trusts it?