SAM CLI- Using "sam build" - Build includes non required folders

Have you tried .npmignore as mentioned on this Github thread - https://github.com/aws/serverless-application-model/issues/308 - "sam build command uses npm to package up the build folder (for nodejs projects), so you can use .npmignore to tell it which files should be excluded from the build"

I have found in my template.yaml file under each resource you can declare a CodeUri - it appears to only build files from this directory. This works well for my use case as I have a seperate lambda layer I use which holds all dependencies needed. I will now just structure my lambdas under seperate directories and share code where needed. Snippet of tamplate.yaml:

  listProvisioningTemplates:
    Type: AWS::Serverless::Function
    Properties:
      CodeUri: src/provisioning/listProvisioningTemplates/
      Handler: index.handler
      Layers:
        - !Ref awsCommandsLayer
      Runtime: nodejs16.x
      Architectures:
        - x86_64
      MemorySize: 128
      Timeout: 100
      Description: A Lambda function that returns a static string.
      Policies:
        # Give Lambda basic execution Permission to the helloFromLambda
        - AWSLambdaBasicExecutionRole
    #Metadata:
    #  BuildMethod: makefile

Folder Structure

AWS-SAM-DIR:
  -src:
    -provisioning:
      -listProvisioningTemplates:
        index.js
  -template.yaml