Your local bitwarden apps „only“ sync with your vaultwarden. So if you‘re not adding and changing multiple entries every day you can just endure an outage of a few hours or even days until you reconnect and sync.
That said, I am very paranoid about hosting my password manager on a publicly available VPS. The VPS provider theoretically has access and if you don’t secure the VPS properly everybody else, too.
So I make VW only accessible via a VPN (wireguard) and only host it locally on a pi. That is also backed up to another pi (Borg with borgmatic).
For me this is a good mix of redundancy, access control and attack vector mitigation.
Performance greatly improves by running it off SSDs. I run it on Alwyzon, Contabo and raspberry pi 4s.
Anything under 10 concurrent users (at the same time) should be fine on 4 GB Ram and 2 cores.
If you start implementing Onlydocs/collabora and add tesseract you might want more.