Mom had one while I was growing up, and even then, I was horrified at the noise, vibration, and harshness compared to the gas equivalent model. The Rabbit Diesel is very loud, and in an unpleasant, clattering way.
It's amazing how far diesels have come. I have a Range Rover diesel, and even most car fans don't realize it's a diesel until I mention it.
I drove a Rabbit Diesel back in the early '80s. It was not a luxury driving experience, but 48MPG highway! I didn't have much money and squeezing in a 700 mile round trip would let me visit my girlfriend over a weekend. Lots of miles in that car (mostly in the dark hours of the night, middle of nowhere, with Tangerine Dream blasting).
I doubt it would come close to passing modern safety standards, and I guess we saw how likely it would be for VW to make it clean enough for modern emissions… but it was an economical car to buy and operate. Here we are 40 engineering years later and all of the "New Small Cars With the Best Gas Mileage for 2022" have worse highway mileage than that 1980 Rabbit.
My dad had a mk2 diesel. He used less than 5l/100km and drove for 200000 km until he sold it with 350000km. As far as i remember he never had a serious issue. It wasn't a comfortable ride but very reliable.