Thank you for the replies. It helps confirm my belief that AWS is just peddling the same security bullshit as everybody else and people keep falling for it.
Literally everybody has been promising general purpose machine isolation for decades and basically every one of them has failed. Actually designing such a system is a extraordinary claim demanding extraordinary evidence. Actual standards that can actually distinguish such a property such as the Common Criteria at EAL 6 and 7 require rigorous verification work such as formal proofs of correctness to actually positively assert such properties. It is ridiculous that people keep believing such claims without any guarantees, verifications, or audits when everything uncertified is so catastrophically bad at achieving isolation.
To quote Theo de Raadt:
“You are absolutely deluded, if not stupid, if you think that a
worldwide collection of software engineers who can't write operating
systems or applications without security holes, can then turn around
and suddenly write virtualization layers without security holes.
You've seen something on the shelf, and it has all sorts of pretty
colours, and you've bought it.“