My prod (now homeprod, thanks for the name!) has no HDDs, just SSDs. It's a proxmox cluster that runs opnsense in a VM for the whole network, Home Assistant also in a VM[1], and most other services in containers. In the age of expensive storage, it has just enough SSD space for VMs and containers. VM backups live on homebase, except for opnsense which also needs a backup on the same machine (same machine, not just same cluster) if the network goes down.
So my conceptual distinction is mostly that the only services/containers I put on homebase are doing work that really benefits being that close to the data. Oh, and I'm in the jolly position of needing to replace the hard drives this or next year. Yaaaaay.
My homelab is currently a cluster of 4GB Pis that I had lying around from before even the Raspberry Pi shortage. Whenever I upgrade my Framework 13 mainboard, I'll probably use the old one as a homelab instead of the Pis.
[1]: Home Assistant's plug-ins are themselves containers, so it's a good idea to give it either a VM or its own machine.