I haven't run an experiment on a glued up scale, but I submerged a piece in water for about an hour. Before wetting it was 0.036" thick, after 0.048", and after left alone to dry 0.038". Unfortunately, I only measured the thickness but not change in other dimensions. On the other hand, I imagine it could easily be a problem if the outer edges exposed to water swell but the inside doesn't. One maker showed me multiple pics of handles with fiber spacers and liners between/under wood that broke the wood and detached the scales from the tang.
I wonder if different finishes affect how much and/or how fast water penetrates. I recently made two knives with vulcanized fiber liners and spacers and wet sanded in a bunch of coats of Watco brand tung oil varnish finish to fill the wood grain, and then did a bunch more applications of oil too. That stuff is supposed to soak into wood some, and I imagine it soaks into the vulcanized fiber too? These were kitchen knives, so likely to see a lot of wet and dry cycling as they are used and washed. I haven't heard anything bad about the one I gave away so far, but that doesn't prove anything.
The variety and vividness of the vulcanized fiber colors beats G10 and micarta IMO. That doesn't outweigh the cons of it moving so much it destroys handle scales though.
For everybody who's had problems with vulcanized fiber, it seems like there's somebody else who's never had any issues. I'm really curious to see the results of Warren's experiment!