What happens once usage reaches the budget? Should AWS simply turn off all of the systems and delete all the data?
You could have 'soft cap and hard cap'. You could have everything deleted except persistent data. You could have everything gets rate limited to near zero to keep the rate of spend per hour below some threshold.
If my business runs of AWS, then rate limit or even reclaim some servers if storage is in S3.
The nightmare scenarios that keep showing up in news are the reason that I stopped playing around in AWS/Cloud.