Here's a quick link to some insulation properties:
All the current (pardon the pun) welding cable I've been able to find has EPDM insulation, chosen for both toughness and extremely wide temperature range (makes sense for lying on frozen ground on a construction site and having hot welding slag falling on it).
The stuff I've read (written by folks with decades of experience in the certified a/c world) indicates that *any* insulation will give off significant quantities of toxic fumes once it gets hot enough to start burning; the trick is to use high temp stuff, and minimize the risk of temps ever getting that high.
The worst thing I've seen about PVC is that some versions will sustain a flame once they start burning, while tefzel & some others self-extinguish when the flame source is removed.
Again, the stuff I've read indicates that teflon didn't last very long as an a/c wire insulation because it 'cold flows'. In a mechanically stressed environment, the wire can actually migrate through the insulation.
The one potentially significant downside to welding cable is space; the EPDM insulation is a lot thicker than tefzel.
I'm certainly no authority, but the info is available on the interwebs, if you're willing to dig a bit.