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Is this any worse than not even knowing when parts of your AWS instance are failing?

If I search my emails: "EC2 has detected degradation of the underlying hardware hosting your Amazon EC2 instance"

It's just something you have to do yourself with Hetzner.

Right but AWS gets to make that choice, you have no idea whether they consider a failing fan as "degradation".

You should compare EC2 with Hetzner Cloud. Hetzner Cloud do send such alerts occasionally.