Lambda Container-Based Function Needs --privileged and --device /dev/fuse

When you deploy a lambda using a container instead of a zip file, lambda doesn't actually run as a docker container. The container is just a packaging construct. At runtime, the lambda function runs just like it would if it were packaged as a zip file.

The ephemeral storage that is assigned to a lambda function can now be up to 10 GB - https://aws.amazon.com/blogs/aws/aws-lambda-now-supports-up-to-10-gb-ephemeral-storage/

Also, it is possible to use EFS with lambda functions - https://aws.amazon.com/blogs/compute/using-amazon-efs-for-aws-lambda-in-your-serverless-applications/