The same way you can use wood to build a house even though you use a tree to make paper.
The material isn’t the only thing that matters, it’s structure matters too.
Vinyl siding is still relatively soft, it can pretty easily be scratched/gouged/dented on accident.
But, thicker vinyl siding is significantly stronger and more resistant to warping than the much much thinner vinyl records.
You aren’t coating your house in a thin layer of vinyl, they’re much more sturdy than that.
For question about making it warp, yes fluctuations in temperature can make it warp, but that is actually a pretty common property across materials, wood can warp too, so can metals, some just need more extreme temperatures than others.
The color of the siding can also be changed by the climate, as radiation from the sun gradually breaks down the pigment in the material making it look faded. But again that’s something that can happen to pretty much any material.
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