I host vaultwarden at home. No real need for a vps since your passwords are synced to your phone or laptop(whatever client you’re using) and you can just sync it when you’re home if you make changes, or setup a VPN (I use wireguard) and sync on demand when needed.
That said, I do sync my database to a vps for dr purposes incase my home server suddenly vanishes… for critical services I follow a 3-2-1 backup rule but it’s not absolutely essential.
With containers, most will have a persistent volume that is mapped to the host filesystem. This is where your config data is. When you update a container, just the image is updated(pihole binaries) but it leaves the config files there. Things like your block lists and custom dns settings, theme settings, all of that will remain.