How would the firewall on one device prevent other devices from abusing the rest of the network?
Sure. I'm not exactly sure any more what I was trying to convey. I think I was going for the firewall as a means if perimeter security. Usually devices are just configured to allow access to devices from the same Local Access Network. This is the case for lots of consumer electronics (and some enterprises also rely on securing the perimeter, once you get in their internal network, you can exploit that.) My printer lets everyone print and scan, no password setup required while installing the drivers. The wifi smart plugs I use to turn on and off the mood light in the livingroom also per default accept everyone in the WiFi. And lots of security cameras also have no password on them or people don't change the default since they're the only ones able to connect to the home WiFi. This works, since usually there is a Wifi router that connects to the internet and also does NAT, which I'd argue is the same concept as a firewall that discards incoming connections. And while wifi protocols have/had vulnerabilities, it's fairly uncommon that people go wardriving or close to your house to crack the wifi password. However, since you mentioned mixing devices you trust and devices you don't trust... That can have bad consequences in a network setup like this. You either do it properly, or you need some other means to secure your stuff. That may be isolating the cheap chinese consumer electronic with god knows which bugs and spying tech from the rest of the network. And/or shielding the devices you can't set up a password on.
the only solution to it would be an application layer firewall like OpenSnitch, correct?
I don't think you can make an absolute statement in this case. It depends on the scenario, as it always does with security. If you have broken web software with known and unpatched vulnerabilities, a Web Application Firewall might filter out malicious requests. An Application Firewall if other software is susceptible to attacks or might become the attacker itself (I'm not entirely sure what they do.) But you might also be able to use a conventional firewall (or a VPN) to restrict access to that software to trusted users only. For example drop all packets if it's not you interacting with that piece of software. And you can also combine several measures.
Lol,
one person[Edit:] 4 people don't like your GNU mug. I do...