Zirconia is viewed as a material of exceptional resistance to amorphization by radiation damage, and consequently proposed as a candidate to immobilize nuclear waste and serve as an inert nuclear fuel matrix. Here, we perform molecular dynamics simulations of radiation damage in zirconia in the range of 0.1-0.5 MeV energies with full account of electronic energy losses. We find that the lack of amorphizability co-exists with a large number of point defects and their clusters. These, importantly, are largely isolated from each other and therefore represent a dilute damage that does not result in the loss of long-range structural coherence and amorphization. We document the nature of these defects in detail, including their sizes, distribution and morphology, and discuss practical implications of using zirconia in intense radiation environments.