SSH waits for the server key before it presents the client keys, right? Does this mean that different VMs from different users have the same key? (Or rather, all VMs have the same key? A quick look shows s00{1,2,3}.exe.xyz all having the same key.) So this is full MitM?
I mean, anytime you use the cloud for anything, you are giving MITM capabilities to the hosting provider. It is their hardware, their hypervisors... they can access anything inside the VMs
You are correct, but I expect they instruct their users to run with a host key validation disabled ( StrictHostKeyChecking=no UserKnownHostsFile=/dev/null) , as they expect these are ephemeral instances.