Instead of "trying to understand the other side", most people would be better served by playing devil's advocate against their own side. Would you know how to identify a virtue signaler if you found one?
It seems to be used to dismiss the entire idea being talked about. For example a liberal saying they want relaxed immigration asylum criteria, and a conservative says they're just virtue signalling, and thereby dismisses the topic. In that way it has become a sort of ad hominem attack. In fact it does a disservice to both sides of the argument because there can be very good arguments for strict asylum thay deserve to be considered but get masked behind such dismissive language.
I don't see a problem using the phrase as long as it isn't used to justify a failure to engage in an actual discourse or debate on the topics at hand.