It sounds like the build tooling was forcing them to distribute a dependency across every lambda build, which was forcing a redeploy of all services, which is a code issue that maybe looks like a tooling issue. Just going off of context.

Regardless, it doesn't sound like microservices, it sounds like a distributed monolith.

Having built a product out of microservices and lambdas I definitely have not found that build tooling has ever forced a full redeploy. I suspect this is just a case of converting a monolith to a microservice being much more difficult than people realize.