That sounds like more of a maintenance nightmare. Why go through the hassle instead of just using Docker/Fargate with either ECS or EKS? If you don’t want to use Lambda?
I've only used Docker w/ ECS and EC2 task definitions, but creating and draining instances is pretty time-consuming and I'm guessing not responsive enough for serverless-specific workloads. If you use Packer and lock down your AMI and atomically update it, I don't see maintenance as being that big of a hassle, but I don't have too much experience in this regards and I value optionality to a high degree. I guess this would also depend on how many microVMs you might be able to reliably stick on an EC2 instance.