Dead code/dependency removal. "Tree shaking". If you only serve one route per lambda, you can be (somewhat) sure about what you need and compile the minimal optimized code path for that.

Less "stuff" in each route, less boot/warmup time for each lambda.

I tend to agree that in a lot of cases just sticking the whole monolith in a single lambda is fine, and that's probably how I would do it if I had to do things manually. But as things grow, it becomes much better to tree-shake unused routes, though dead code detection in Ruby might as well be a pseudo-science with all that Ruby can do lol