Not quite, PC gets hacked, on hacked machine someone does something like cd, but on that PC cd has been set up as an alias for some sort of command that downloads a malicious executable to the hackers machine and executed it.

That executable very well could be a keylogger, but doesn't necessarily have to be. It could be be rm -rf --no-preserve-root / or a reverse shell or whatever really.

I imagine cd would be a terrible choice to alias given how much it's used, but maybe something else more obscure could be used that is frequently used when bots/attackers are rummaging through files for stuff to steal.

Partially for sure. Other part of this would be somehow executing a command on the attackers machine that originated as their own input, but they wouldn't be privy to that due to the alias.

I've seen some videos where people will willingly let scammers into their machine, and Honeypot them with a file that they execute, typically named like credit card info or bank info or something. But they knowingly click that and open it, I don't know what needs to be done on the "make this code execute on the attackers machine" part.

If someone is ssh'd into your machine, are there any escalated privileges you'd already have back to their machine because they've willingly come to yours?

Should be whoami tho.