Because Catholicism and by extension Christianity are so big and normal I don't think a lot of people consider how strange the Vatican is just conceptually. Like yeah in the capital of a long-dead empire there's an opulent temple district that acts as it's own sovereign nation, still speaking the dead language of that empire for their rituals, ruled by a prophet-king chosen by a secret conclave of the high priesthood. Yeah his followers eat a lot of fish in the spring.
Look: say what you want about the Roman Catholic Church (and I have said much, and will say much in future), but that bitch, as an institution, is a survivor.
In a huge way that's what even the current (a year after OP's post, this being the second time the Lefebrvists are being excommunicated) kerfluffle - and all "mad about Vatican II and the Church having the audacity to be more focused on proving that it serves the poor and the vulnerable than proving that it can tell people how they're allowed to have sex and that they're not holy unless they are also Catholic" piss-fits from so-called tradcaths - is about: in the middle of the twentieth century, and in some cases even solidly previous back into the nineteenth century, very powerful people in the establishment started heavy duty realizing that they were losing the laity at an alarming rate. And they realized that they were not losing them to Protestantism (which had also started losing people, in a large scale way) but that people were literally going " . . . maybe I just . . . don't want this church thing in my life" and often the tagline was "because frankly it makes me miserable, and sucks, and is hypocritical as everloving shit, and is just a lot of work really."
And you can shake your fist at that all you like on a purely moral angle (people should care more about the state of their soul than - !) but the Church did not survive the 1800+ years of violence and upheaval and threats from secular powers that actually did march right up to the gates with an army that felt ABSOLUTELY FINE about killing everyone inside . . . it did not get through all of these by ignoring the pragmatic realities. The schismatics will try to give you the impression that eg Vatican II reforms were the pet project of specific popes but almost 3000 bishops spent a number of years hashing them out and they were quite literally voted on by the assembly of bishops and at no point did any one of the reforms get less than over a two-thirds majority (the one that was the least amount over was actually the first vote on a thing about how to use broadcast media).
And the special status of Vatican City in the world is not something that was coincidentally bestowed or just Happened to the Roman Catholic Church. The historical struggles over control of the physical city of Rome, and the land surrounding it, and then post-Unification - like this was fought over and the key, core, most important part of it was at heart ensuring that the bishop of Rome - the Pope - did not actually answer to the laws of a secular power in terms of trying to do his job as pope. At certain points in history this de-facto wobbled as one secular power or another invaded Rome with "forcing the Church to do what I want" in mind, and the other side of the wobble was some OTHER secular power going HEY THAT'S OUT OF BOUNDS and people died over it; and then the point of the papal states was to go ok you can't do that anymore because we actually own a country around us, and then the people unifying Italy were like no we require Rome for lo what is Italy without Rome and there was a huge fucking fight about what to do about that before the Lateran treaties validated this weird little city-state we now have inside Italy and Rome called "Vatican City".
But this is because the Roman Catholic Church wants to survive, and wants to survive as what it can recognize as itself, and not answer to any king or president or anything else in terms of where its supreme pontiff Actually Lives.
But it is also weird, as OP says - except that in a way that makes it sound like this passive thing that just sort of Happened and Continued and in reality Vatican City is an idiosyncratic little peg in the long line of Wild Shit that this weird little institution has done in order to Keep Being Here, and Keep Being the Roman Catholic Church.
(To be clear, Lefebvre / Society of Saint Pius X members didn't excommunicated for opposing Vatican II or saying it was all terrible and the Church / popes were wrong to follow its direction. They got excommunicated for ordaining bishops without permission. Twice.)
