A parachute does give you a lot of material to work with, but it is designed to be a half-sphere. Hanging it from the center and tying/staking out the bottom edge will still leave a whole lot of extra fabric flopping about.
They do work great for a "sun shade", and so-so for shelter from the rain. The steeper you set it up, the better it sheds water. But that also narrows down the final floor space.
Waterproofing will be problematic. Most parachutes are made from a modern nylon type fabric of a fairly open/loose weave. Waterproofing soaks into the threads of the fabric, and swells them up so that the little gaps between the threads are closed up. The more the threads swell up, the tighter the fabric is and the better is sheds water.
So they will work better as a "fair weather" shelter or sun shade.
Early parachutes were made of silk - like those used in WWII and before. Silk offered the best strength for weight combination. After WWII, they developed better/cheaper modern fabrics to use - like nylon. I haven't done much reading on parachutes, but I don't think they ever used cotton fabric.
So, in my opinion based on the few parachutes I've worked with, they are better for fair-weather sun shades, and only work so-so for shedding rain (unless you set it up with really steep sides).
Just my humble thoughts to share. Take them as such.
Mikey - yee ol' grumpy blacksmith out in the Hinterlands