Microbes use poison to prevent other microbes from taking over the lovely piece of filth they are eating. Many of these poisons are very sturdy and can survive acid. This is why you can't just cook rotten food and eat it, even if you kill all of the microbes the poisons they made stay behind.

We don’t necessarily, it depends on the extent and type of bacteria causing the mould, your personal susceptibility to that bacteria, and indeed how your body handles exposure - such as digestion.

It is a bit of a misconception that mould is bad in absolute, but for the ease of removing obvious mould from food - such as cutting the mouldy bit off some generally un mouldy cheese - you may as well do it.

Sometimes it does. Not always.
Though another aspect is the compounds of the molds and bacteria like the toxins they produce. Those don’t break down or not enough to help and are part of what causes issues.