AFAIK it's not a solution, it's just a workaround.

As others have said, the previous workaround was a cron event that would invoke a function every few minutes to keep it warm. This is a lot better than that.

They're still working to get cold starts as fast as possible, but this helps a lot in the meantime.

Your function is frozen if there is no active invoke in progress. So no, ssh or minecraft server will not work, unless you make them communicate over Lambda invocations.

Even if it were not frozen, the idle "Provisioned Concurrency" price is still more than paying for an active on-demand ec2 instance.

Cold start is inherent to the Lambda model, trying fixing cold start will probably bend the model, there is no way around it