Bulging batteries mean your charger screwed up. Lithium chargers are supposed to shut off when the battery is full. Now we can argue as to why it happened (bad communication with the battery is frequently implicated, which may be the battery's fault!) but the fact of the matter is that this happens because the battery was overcharged or damaged by too-deep discharge.
Don't use it. Damaged lithium batteries can burst and catch fire, and it's very difficult to put those fires out too.
As for "self-discharging faster" that's a false canard. Self-discharge rate is a function of battery chemistry and quality. Some third-party batteries are inferior in quality, but not all. If you buy high-quality third party batteries you'll be fine.
Watch out for the stock Canon charger though -- it is tightly-integrated with the chip in the genuine batteries and I have found that it will systematically undercharge some third-party packs. This will lead to lost capacity and over time if not paid attention to can lead to a reverse-charged cell. In a lithium pack this is extremely dangerous as it can cause internal shorts (which lead to bulging packs and/or fires.) If you stick a battery in the Canon charger and it goes "green" in far less time than you expect there's a problem! There is no magic here -- charging takes "X" time given a known maximum charger output.
Wasabi ships their batteries with a very nice and compact charger that appears to not have problems with either Canon's packs or third-party ones. In addition it's smaller and lighter; I like it plenty and that's the one I take with me when away from "home base" as in addition to its other good qualities it comes with a car cig plug cord, which is very convenient while "on the road."