Azure Function Proxies not working. Again.

[scale-tone]

Deploying this sample app to this fresh new SWA instance: https://calm-cliff-07e291203.5.azurestaticapps.net using this 'Deploy to Azure' button.

The deployment just fails with meaningless Failed to deploy the Azure Functions. message.

Discovered, that if I temporarily remove SWA_ENABLE_PROXIES_MANAGED_FUNCTIONS value from app settings, the deployment succeeds (but the app obviously does not work, because it requires those Azure Function Proxies to be available).

Re-adding SWA_ENABLE_PROXIES_MANAGED_FUNCTIONS setting then breaks the API host - API endpoints start returning 503 (you can see that yourself by navigating to instance's URL and checking network calls).

Azure Function Proxies are not deprecated, either in Azure Functions or in SWA.

It worked in May. Why does it not work again?