Notably, anywhere in the AZ is simply a launch constraint, and the hyperscaler can and does place you in the most advantageous way for them which matches against the 'customer promise' (constraint). They in practice do model both the volume and cost of East-West traffic in their network topology and will wherever possible not place Instance A and Instance B all that far apart in the AZ, particularly if that AZ is one of the big ones with 20+ datacenters worth of capacity.

All the other points you made are also excellent.