Lambda extensions error - during Invocation

Hi There. So I have a simple FLASK app, which allows the user to upload a file, this file then gets uploaded into S3, which triggers a lambda function. PS: this setup is on Localstack on Docker containers.. All works fine, up to the part where lambda gets invoked. If I look at the lambda logs in my docker container. I get the below, It seems to be looking for extensions or some sort - which I do not have.
I have tried various fixes, which does not work, changing file permissions of my zip file etc. Please kindly shed some light and point me in the right direction. How can I avoid lambda from looking for further extensions.

clinton@clinton-VirtualBox:~/Documents/MyCode/localstack_tutorial/terradyno$ docker logs 19195234484c
time="2023-06-26T22:21:36Z" level=warning msg="Cannot list external agents" func=go.amzn.com/lambda/agents.ListExternalAgentPaths file="/home/runner/work/lambda-runtime-init/lambda-runtime-init/lambda/agents/agent.go:71" error="open /opt/extensions: no such file or directory"
time="2023-06-26T22:21:43Z" level=warning msg="Reset initiated: Timeout" func=go.amzn.com/lambda/rapid.handleReset file="/home/runner/work/lambda-runtime-init/lambda-runtime-init/lambda/rapid/start.go:589"