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Sorry for the silly question, but the slides seemed to indicate that any USB keyboard can read any other keyboard's keystrokes? Is that a correct understanding? Otherwise, I don't see how they can steal passwords. Am I just missing something obvious?

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Their evil keyboard runs commands to install malware which capture your password when later entered on the good keyboard. i.e. Their keyboard types "install keylogger".

No, USB keyboards (or mice) can't. That's why some keyloggers use a certain sequence of capslock/numlock/scroll-lock presses to trigger output of a menu or the stored data: The status of the corresponding LEDs is the only information a PC sends to a keyboard.

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