This is not under the Vatican. This is the Chapel of Bones in Portugal. It was made by Monks in the 17th Century.

43 Cemeteries were taking up valuable land and were excavated. Instead of condeming the dead the monks built the Chapel to house all of there bones.

Since Evora, Portugal was a wealthy area monks thought showing these bones would allow ppl to reflect on life itself rather than their wealth. It was a place to show that life is fleeting and don't take life for granted.

That's how the story goes anyway...

https://www.atlasobscura.com/places/portugals-chapel-bones