I maintain bare metal, traditional cloud hosting, containers, and serverless (plus "serverless containters") and this is how I think of it:
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Serverless is more like it's running everywhere and nowhere all at once. One line of code might be 3000 kilometres from another.
Short story. A former employer did almost everything "server less".
So, instead of any physical servers, there would be AD controllers, file servers, and remote desktop servers in azure VMs instead.
I'm pretty sure that some of the largest deployments were nearly as expensive per year as the hardware would have been to just run it in house. Like, you can buy a whole-assed server, capable of running your entire workload, every year that you run "server less"
And what did I do? Well, I managed and maintained server VMs that happened to be in azure instead of a device that the company owns.
The whole thing was baffling. Why anyone would do things that way just amazes me.