I tried once to put some ETH into LST and then do re-staking.

At first, that little "extra yield" looked pretty attractive, but then I calmed down and thought: money doesn't grow out of thin air.
The main sources are actually two things—one is the interest from the underlying staking itself; the other is the project’s effort to attract users or someone willing to spend money to buy "security/services" as a subsidy for you.
To put it simply, like a coffee shop offering points: what you get isn’t a free benefit, but someone else has already covered the costs upfront.

The risks are also quite straightforward: adding an extra layer on the chain increases the chances of errors, being hacked, or suspension of withdrawals, plus liquidity crises can cause issues.
Recently, seeing the inflation and the storyline of studio-driven coin price spirals in blockchain games also reminded me: once subsidy-based yields have no one to take over, they quickly turn from "incentives" into "backlash."
Anyway, I stopped after that attempt—being able to sleep peacefully is more important than earning a few extra points.