It's likely this is a hypervisor misconfiguration. Either way, one has to wonder what kind of mitigations for cross-tenant leakage they are missing.
Either it's a misconfiguration, or it's intentional (only providing a "bare-bones" machine for the lowest price level, even if the underlying hardware would support more)?
Or on purpose, because the CPUs with AVX are more expensive. Or historical: the hardware for this kind of service may have been old, and you can't tell people that if you buy today you get a processor with AVX, but tomorrow you may get one without. I haven't checked if they upgraded their low-cost options in a while.