If you go out on the street to give homeless people food but your main motivation for doing it is so you can take a quick selfie for some feel-good reactions on instagram and facebook, you're definitely virtue signalling in a particularly irritating way...... But, those homeless people still got some food as a result, and somewhere else, someone else might see your posts and decide to do the same thing (with or without selfie, depending on how much of a self absorbed ass they are) Either way, the net result is that now more people are giving food to the needy in this simple example. A net benefit is produced by self absorbed behavior.

When virtue signalling can become dangerous however is in situations where something based on a mistaken notion of doing good (when in reality it does more harm) becomes a fad and people who virtue-signal keep promoting it into wider popularity.

I don't think people become more virtuous by saying a few words and doing nothing. If you say you care about the environment but do absolutely nothing about it, you don't care in any way that matters. It's just a social signal without any impact on the world. Buying a Tor sticker doesn't promote privacy. Buying and running a Tor node does.