All praise is due to Allah, and peace and blessings be upon the Messenger of Allah.
This hadith does not mean that a person who abandons all righteous deeds will be saved from Hell without qualification. Rather, the scholars explained it in a way that reconciles it with the other texts of the Qur'an and the Sunnah.
Shaykh Ibn 'Uthaymin (may Allah have mercy on him) mentioned that the hadith may be understood in one of two ways:
First: They believed in Allah with true faith, then died before they had the opportunity to perform righteous deeds. Thus, it is accurate to say that they "never did any good at all."
Second: The hadith is general in wording but restricted by other Islamic texts which indicate that some deeds are inseparable from valid faith. Foremost among them is the prayer, according to those scholars who hold that abandoning it constitutes disbelief. Therefore, this hadith does not include those who abandoned acts whose omission has been established by evidence to expel a person from Islam.
Accordingly, the hadiths of intercession do not contradict the texts that require the observance of the pillars of Islam. Rather, the Islamic texts explain one another, and unrestricted texts are interpreted in light of those that are qualified.
The Prophet's ﷺ statement, "They never did any good at all," does not mean that they spent their lives abandoning every religious obligation and were still saved. Rather, it means either that they died after embracing true faith but before having the opportunity to perform righteous deeds, or that the hadith refers specifically to those who retained the essential foundation of faith established by the Islamic texts. It does not include those whose faith was nullified by abandoning acts that are considered disbelief by textual evidence, such as abandoning the prayer according to the scholars who hold that doing so constitutes disbelief.
And Allah knows best.