Its IS running arbitrary executable, but so is installing some 3rd party Program and even some program uploaded to the Microsoft app store or a Linux package manager isn't necessary much different. Sure Linux package index maintainers give them "due diligence" but that has limits and Microsoft replaces that mostly with some automated scanning, which isn't better.

But when it comes to the aspect of managing updates, project specific installs are better.

And when it comes to security then the answer for both installed and project tool-chains is: Sandboxing.

- run your toolchain in a container

- run your IDE in a different container

- run hardly trusted tools in another container

- use reasonable phishing proof 2FA (i.e. FIDO2) for authentication, use authentication tokens.

This applies to "normal" applications, too. They also should run in their own container. Just because it has an installer or is signed by a company or is on a app store doesn't mean it's trustable.

Thats one of the things phones at least somewhat got right, their apps are containerized by default (through they might give too much permissions to apps but that's a different problem)