It doesn't expire? People just use it up, and don't buy more until they've used all their store.

>What becomes of the companies that had to scale production, create new factories, hire new workers etc... when the existing glut of supply is not only so much that those new facilities are hurting them, but also that it has decreased the demand for their product even with normal production capabilities?

They only would have made the decision to scale production if they estimated the profit from filling this short-term demand would make up for the cost of having to eventually scale back the temporary investment. It's not exactly hard to predict that the demand won't last forever.

Ultimately the amount of toilet paper bought/consumed isn't going to change significantly, just the purchase dates will cluster together.