The releases are completely stable. I'd go so far as to say that FreeBSD/EC2 is probably more stable than FreeBSD on native hardware, simply because you're less likely to run into weird driver issues with obscure hardware.

Would you recommend it for production use?

Absolutely. I've been using it for Tarsnap for years.

Is there a suite of compatibility/performance tests that is run on AWS for each release?

Not that I know of.