Sorry if I'm misunderstanding, but the hypervisor in the cloud (i.e. the VM running under your "instance") is to protect the cloud provider from you. The Hypervisor you're running (firecracker, kata containers, gvisor, nabla, etc) are to protect your dangerous workloads from your other workloads.
It is totally within your power to choose to run 1 cloud "instance" per workload so you don't have to worry about cross-workload contamination, but if you want to effectively multiplex your workload on constantly available machines, you're going to have to mix your workloads, and that almost certainly requires protection of some kind.
In an ideal world we might all be getting VMs that were unikernels that are a bit safer to use but in general it feels like you need to isolate these workloads somehow if you're going to run them on the same "instance". What does your perfect/preferred world look like?