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out.txt

Here's the entire log of an example stack update I attempt creating a lambda

I think what happens is there's a retry timeout of 1 minute here <https://github.com/terraform-providers/terraform-provider-aws/blob/master/aws/resource_aws_lambda_function.go#L402>
and since it takes more than 1 minute to create the lambda, there's one retry attempt that runs the create function routine again, which leads to the error.
A simple solution would be to increase the timeout to at least the timeout of the AWS API call IMHO

OK I solved the issue by moving all the node_modules into a lambda layer, so now the CreateFunction for a lambda finishes much faster, so I don't hit the timeout bug