[throwaway984393]

It's not just a temporary failure, it's potentially the entire AZ going down hard. High Availability network boot without local storage is very difficult/expensive.

They can still use local disks to provision the OS over a network but boot from local storage, and prevent writing to disks from the booted OS (hell, they can completely remove the disk drivers from the kernel!). It just doesn't make sense to ditch the drives from a reliability standpoint. They're going to have a big outage one day just because they didn't want to deal with drives.

[encryptluks2]

Mullvad and similar providers often colocate or rent servers from multiple local hosting providers. A group of servers going down for them would not be a big deal. Network boot is not difficult/expensive. Many of their servers are using 10Gbit uplinks+ so I take it they get pretty good deals for bandwidth. It isn't like Amazon or other cloud providers that charge an arm/leg for egress.

The point of not using local disks is again fairly straightforward, to show that they do not have a stateful storage medium to write logs to. Whether it significantly helps or not is beside the point, they have determined that it helps provide assurance to their customers and additionally showcases a feature for auditors.

Network booting loads the OS into RAM, so even if there was a network outage they'd have to restart the severs to cause a problem. From what I know of most VPN solutions though, again a network outage would only affect the group of servers at that data center which isn't their entire operation.