I should say, I will run binaries on VMs and feel very little threat from doing so. The "with no exceptions" referred to the main host OS. I should have been more clear about that.
To answer your questions, oh hell no; definitely I do not audit source code myself. Though I have rarely. I do it this way, and it is different enough for me, because someone could audit the source in theory. If someone did audit and found a security problem, then I could check to see if my source was also compromised. If I install binaries, then I might not ever be able to know if my binary was compromised. Maybe someday if reproducible builds are guaranteed to be bit-perfect, then I would use binaries from reputable sources, but that would only happen in the case where third parties are compiling from source and affirming the reproduction. In that case, why not just compile it myself?
Developers who publish compromised source are going to get burned. Developers who publish compromised binaries are going to say, "omg we must have been compromised by someone else." Obviously it is possible for third-parties to compromise source, but I'll go with what I see as the lesser threat.
If the cost of compiling was high, then that might make a difference. For me, the cost is negligible, which makes it a no-brainer for me.