First and foremost, wood shingles, such as cedar shakes, retain water. This is the natural tendency of wood products, as they are completely natural. When cedar shakes are used as an exterior siding they are meant to breathe so that they can evaporate the moisture that they retain through soaking in condensation or taking in rain. If something is installed over the top of the surface, such as vinyl siding, they cannot breathe. This leads to mold, mildew and, in the worst case, rot.
Vinyl has very specific installation instructions. The vinyl needs to be installed over a waterproofed surface that is properly prepared. In addition, the way vinyl siding is mounted is via nails and screws that are meant to be sunk into a sheet of plywood or other sturdy wood, and, ideally, into the actual wall studs themselves for vinyl panel siding. With wood in between the vinyl and the house, the mounting cannot be followed, which means basic installation instructions cannot be maintained, voiding any warranties.
Part of a good vinyl siding installation is the inclusion of waterproofing, which covers the plywood or oriented strand board sheeting that is installed on top of the wall studs on the exterior of the home. If a layer of shingles or wood siding is between the vinyl and the waterproofing, the waterproofing isn’t going to be able to do its job, which is to shed water. Instead, the wood traps the moisture, causing rot and mold. You cannot install waterproofing protocols on top of cedar shake, as they are meant to be installed on top of a flat surface, such as OSB or plywood.
In addition to the manufacturer guidelines for installation, vinyl siding needs a completely flat surface in order for the proper interlocking methods to be used. The pieces are meant to be laid down flat, which cannot happen on top of shake shingles, as those are installed overlapping each other, with each upper piece overlapping the lower pieces at an angle. Cedar shakes need to be completed removed so that you can perform the proper installation for vinyl siding, from the basic wall studs up to the final product.