How does it affect driving when the tread is worn away and the tires are 'bald'?

Answer 1

Bald tyres have less frictional grip on the road surface, especially during wet or frosty weather. Therefore, skidding off the road or crashing into other road users is greatly increased.
Bald tires have almost no traction and are very dangerous. Hit any amount of water and your car will hydroplane. They are also very suseptible to a blowout.
If it is wet, tyres slide. Shallower tread worsens wet situations by allowing more water to stay beneath the tyre.
How they will affect your driving is that during precipitation events, the tyre will not be able to 'pump' water out from between the road surface and the tyre. In that event, the tyre will ride up on that film of water, lose traction and put you in a ditch.

How bald tyres will affect your fuel consumption:

If your tyres are worn and bald you will likely run into something when your car hydroplanes on water. After the car runs into something, it will be less aerodynamic because of the damage to the body. If it is less aerodynamic, it will take more petrol to push it through the air.
You will loose traction when any debris is involved such as gravel or rain (especially rain, hyrdroplane non stop and wont be able to turn well and still not come off the road). Also it will start to lose air pressure which will make the trie roll off the rim while truning. And its way thinner as of protection to objects penetrarting the rubber and creating a hole. Deffinately should get new ones when that happens. Performance descreases but safety dissapears.