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An option exists, but they prefer you use the block storage API.

No, as in Lambda itself uses FUSE as an implementation detail of their container filesystem.

It seems there were some major issues, but AWS has developed around them and optimised for its needs; (https://www.madebymikal.com/on-demand-container-loading-in-a...)

Fair, but far from a common advice I’m willing to tell people (other CTOs) to do.