Learn Polish: Ten skrót jest niebezpieczny, za to malowniczy. - This shortcut is dangerous, but on the other hand it is scenic.

While ale simply means "but", za to adds the meaning of a trade-off or compensation. It tells us that the shortcut being scenic makes up for the fact that it is dangerous. You can translate it as "but on the other hand" or "but in return".

Do I need to repeat the subject or verb after za to?

No, you don't. Because za to is coordinating two adjectives (niebezpieczny and malowniczy) that apply to the same subject (ten skrót), you can leave out the second verb. It works just like English: "dangerous, but scenic" instead of "dangerous, but it is scenic".

Why are the adjectives niebezpieczny and malowniczy in the nominative case rather than the instrumental case here?

When you use the verb być (to be) to link a subject directly to an adjective without a noun, the adjective stays in the nominative case (Ten skrót jest niebezpieczny). You only use the instrumental case after być when the core of the description is a noun (for example, Ten skrót jest niebezpiecznym miejscem - This shortcut is a dangerous place).

I see the word malować (to paint) inside malowniczy. Is that a coincidence?

Not at all! Malowniczy literally comes from the verb malować. It describes a landscape or place that looks like it belongs in a painting, which perfectly matches the English words "picturesque" or "scenic".