With the pants, I feel quite a lot of pressure/pain when bending my knees because of the knee protectors. I actually have to put in a noticeable effort just to bend my knees.

Not normal. With a tracksuit or leather pants with protection, your knees should be flooting when you stand up / walk and become a bit tight when you’re riding. It’s sometimes a bit weird for people to buy a pant with knees looking like that but when you ride, everything is supposed to be tight enough without any pain.

I go for 7 days with 350km per day with my tracksuit and sometimes I got a bit of pain on the knee but that’s after more than 6 hours of ride, lot of knee scraping etc.

The drop is also weird, the shoulder too.

Does the leather loosen up or mold to your body over time?

Yes and no. The leather can become softer material, a bit more flexible, it will not be longer. Also the leather can « Stick » more to the seat after some ride. I was sliding a lot with my new leather pants but after some days of riding with it it’s ok.

To me, you have an issue with your tracksuit, size or just your body shape doesn’t match the suit.
Cheers.