Paying for a house with bitcoin sounds to me a mistake or lack of financial knowledge. Bitcoin is better than Fiat.
NO, it is not a mistake. The person from Argentina has contributed in the adoption of Bitcoin as a payment tool or a digital currency. He also probably paid with Bitcoin because it is more profitable for him. I'm sure he won't do it if paying with Bitcoin will be harmful for him.
We don't compare Bitcoin and fiat here. In the term of investment, surely Bitcoin is much better than fiats. But it is about paying something with Bitcoin, it is not about investment. Sure, the person can use fiats but he may have certain perspective. He may want to show others that we really can use Bitcoin for anything, including for paying house rent. He will make a history if he is the first one who did it in his country.
Why then would one spend Bitcoin instead of fiat on a house rent which may expire in few years?
We don't know about this. But he must have a reason.
Moreover the house owner will not hold the Bitcoin.
How do you know the house owner to never hold Bitcoin? How if the house owner is Bitcoiner as well?
I think the house owner won't accept Bitcoin for paying house rent if he isn't familiar with Bitcoin. IMO, the house owner will use the Bitcoin for his digital asset.