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There are three use cases Outposts is primarily used to meet, latency sensitivity, local data processing, and data sovereignty. Local data processing by providing services VIA AWS services that run on an Outposts could be possible. However, Outposts requires a stable connection back to the AWS Region for control plane functions over the Service Link. EX: IAM rule/policies to validate an S3 put request. Outposts is not meant to operate in a disconnected state. If the use case is to provide core services internally when the internet connection is down and Outposts would be impacted during that outage we would need to look at some ways to engineer around that case or use another solution. Engaging your SA and an Outposts specialist is what I would recommend here.
As far as traffic routing, data plane traffic can route to the region or locally first, or various combinations, it's highly configurable using Layer 3 and BGP. Outposts has a construct called a Local Gateway (LGW) that is used for local network traffic to communicate to the Outposts instead of going to the region. But the control plane traffic does go to the Outposts first via the Service Link.
Here is a link for the services supported on Outposts. Lambda and Step Functions are not currently supported. https://docs.aws.amazon.com/outposts/latest/userguide/what-is-outposts.html
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