The consensus from security experts and a number of online discussions is that Waydroid is not a secure solution for running sensitive applications.
Weakened Security Model: Waydroid’s primary security issue is that it largely disables the core Android security model. This includes the Android app sandbox and SELinux (Security-Enhanced Linux).
Outdated Android Version: Waydroid’s image is based on an older version of Android (LineageOS based on Android 13, according to a recent report). This means it is missing many important security and privacy patches that have been released in the Android Security Bulletins since then.
Those are some things worth mentioning.