Why does lavender oil dissolve plastic?
Based on appearance and extent of deformation, your bottle is likely made of PVC plastic which is not compatible with oils. Plastic bottles are made from blow molding. This process leaves residual stress in the polymer chains of the materials but  creates a smooth and transparent surface. Lavender oil can diffuse into PVC and make it softer. Once it is softer, the polymer chains can relax some of the residual stress which makes the surface rough and as a result appear cloudy due to increased scattering. Given Long enough more lavender oil can penetrate the plastic and soften it to the point that the plastic is allowed to flow which causes the observed deformation of the top.

Now I cannot say with certainty it was PVC that your bottle was made from, but if it was, then plasticizer would have seeped into the oil which isn't great for people. If you want to use your oil for air freshener or candles that is fine but I would not recommend it for skin contact applications.