It's been the opposite for me.
Back around 2015-2016 I was very excited about cloud functions, serverless, etc, but these past years I've gone back to mostly running VMs with regular persistent apps.
Complexity has gone down considerably and there's zero lock in. With Docker I have full control over the platform and can run these apps pretty much anywhere I want and how I see fit.
With Fly it's trivial to get scale to zero. I wrote a little tutorial here recently:
https://community.fly.io/t/implementing-scale-to-zero-is-sup...
I still use some serverless stuff for very specific use cases, like enhancing a static site with a bit of backend logic, but definitely not as the main solution to run the bulk of my backend apps.