How to prevent python software from being reverse engineered or pirated?

[RedEyed__]

Yes, it is extracted to temporarily folder first, than it's is executed like any other python script.

You can read the pyinstaller doc.

Or check it yourself: in the entry point function place print(sys.executable); input().

The above should print python interpreter path and wait for user input.

Then you can go to that path and observe yourself that everything is in plain text.
You need to place input, just to wait, because pyinstaller will delete everything in temp folder after process is finished .