Erk. I get where they're coming from, but it feels like they're choosing lower AWS costs, but in doing so, incurring higher dev costs.
But maybe, that's a trade-off that makes sense for them. Would like to have more background on this balancing act - e.g., what "functionality" means to them.
The other concern I'd have is the risk of unanticipated spend, serverless techs can scale up really well, and your costs can also scale up hand-in-hand.
I guess it depends on how bursty their product is.