Virtue signaling definition
Virtue signalling is the expression or promotion of viewpoints that are especially valued within a social group, especially when this is done primarily to enhance the social standing of the speaker.
I think what is called virtue signalling is what follows closely to what the Pharisees are doing. We all want to appear as good people, but know that we are not. So what we do is recognize what society expects good people to do, and signal to others that we are good in ways that we are expected to be. It is not just pride, or a false sense of pride, in not humbly projecting ourselves as the sinners we are to the world. As often as not, we signal our virtue by emphasizing that we are not like "them", the hoi polloi of any given society that the people on top of the chain detest. The hoi polloi that the Pharisees signalled their virtue against were people like Jesus and his rag tag band of followers.
Today, the target that most people signal their virtue against is right wing and Traditional Christian values. "I am not a sexist, like those right wing Christians", I am not a racist like those right wing Christians-Look at me, at how I snarl at them!! See look at my virtue".
Hypocrisy is often considered to be having a high set of standards, and not living up to them. There is some truth to that, as long as society as a whole believes in those standards, and we are only pretending to live up to those standards. To not live up to those standards that we otherwise believe in and adore, and to not pretend, does not make us a hypocrite. It only makes us sinners, perpetually throwing ourselves at the mercy of God.
As long as we believe in the standard, the standard is a living breathing thing. Sinning does not break the standard; it in fact confirms it. But only pretending to believe makes the standard stale, and that is where hypocrisy begins to rear its ugly head.
However, to drop all pretense of believing in that high standard is often where society is at right now when it comes to traditional Christian values. For someone to muck around with girls under their desk because this is the standard they hold themselves, does not make someone a hypocrite, one might suppose. For them, and for the society that rejects that high standard, they are no longer hypocrites.
They are just evil, nothing more, nothing less.
Of course secular society has developed its own post-Christian set of higher values and standards, and this is where the virtue signalling and hypocrisy exists today. Nobody believes that girls and boys are interchangeable terms, for example. But to the extent that we are expect to echo that higher standard, we all are "look at me, aren't those Christians who want ladies with penises not to have showers with their children in the ladies room just awful, awful people!!"
when we echo standards that we don't believe in in order to look good in the eyes of those with power over us, we act like the Pharisees did. That is where the bigger hypocrisy exists today.
In contrast to the real Pharisee attitude (more at the end), most virtue signaling is about another thing is my estimation, based on people I've known.
My sense in a variety of churches in different parts of the country that I've been when I've attended enough to really know (like more than 20 times) is they they tamp this down in various ways pretty thoroughly. For instance, these midwestern Lutherans I've gotten to know recently seem to deal with this by effacing themselves most often. For some, repeatedly reminding us of their sins, that they are 'not a sweet smelling rose' or whatever funny words they have for that, another kind of effacing. For a fair number there is instead a kind of stern quiet stoic demeanor it seems. They aren't that bad, but it does take a while to get to the point they will crack a smile, if you aren't of that culture and know the right cues.
In contrast the Church of Christ background from Austin I had partly come from is as different from all that as night and day. They hide, carefully, their charity, as Christ instructed. It happens a lot I finally figured out, but is even hard to uncover even in your own family, even if it's ongoing. An example is me helping my Grandfather do 'recycling' of high quality office paper in the early 70s....turned out that it wasn't for mother Earth, but for a charity, and I had zero idea, even after hours of work on multiple occasions, and years of time, and only found out by reminiscing with my Grandmother after he passed away, about 40 years later. It's like that. The left hand really didn't know what the right hand did.
They also put 0% importance in their....graceful social interaction, the total welcome of any normal looking stranger (but only some would welcome the out of the norm back in the 70s when I was in that church), effusive, but this is down there merely the norm, the only way that anyone is to be, to begin with, no credit for that. But you will get grim expressions if you aren't acting right. (I got more than one or two in my twenties when they guessed I was having sex without marriage). So, it's like the reverse of the problem you are addressing really. You have to be up to snuff or you get excluded. Being up to snuff is considered only a mere norm, of no note.
My observation about the problem you are addressing is that it doesn't show up for most in-person interactions except in a certain way -- a person trying to meet their own internal need to not to feel bad about themselves, to try to medicate their chronic feeling of some kind, such as feeling they may seem unacceptable. They fight an old feeling.
They want to avoid that old feeling, and not feel they are a bad person. This is due to earlier conditioning of some kind, having nothing much to do with their actual adequacy or progress, but instead an emotional need from early in life I think, usually. So, sympathy to them is a good response then. In other words, imagine if you were in their shoes, and be kind to them.
Finally, about the real Pharisee attitude, in the gospels it comes across as self-righteous. It's not about desperate for approval, but is instead a whole 'nuther thing. It's about 'I'm better than those people'. That nasty attitude, judgemental and superior.