There really is no cause for concern; things that used to be purely mechanical are now electric. Any modifications made mechanically before could be equally disastrous.

Yes, software modifications are easier to hide, but that it is a price worth paying for the greater general freedom of everyone.

Not if you hash the software and find its been adjusted. In that sense it is easier to detect.

The hobbyist. Why would anyone else be liable for something a person did that then failed and caused harm?

> Insurance companies are going to fight it, maintaining that unauthorized changes were made which would release their liability.

The insurance company covers the car so you'd have to consult what their terms are in regards to modifications as plenty of people modify their cars today just not the software. I can't imagine a software change would be radically different to a hardware change in the insurance's eyes unless it's something incredible like an autopilot.

The hobbyist isn't the one with money. The manufacturer will be sued, and they usually settle because there is probably something they could have done that would have made the failure less likely, injury trials are bad press, and jury sympathy is always on the injured little guy's side.

This is how it plays out with physical products, I don't see why it would be any different with code.