Yes, I do the same. For service roles I just use the PowerUser managed role. I don’t see the need to put access control on Amazon’s ability to call it’s own services. I only restrict my EC2 instance profile, since that’s a bit more vulnerable, and I tend to know very precisely what it should have access to.

What if you have a lambda with a full admin role that is not sanitizing its inputs? Or maybe it's using an outdated file parsing library (csv/yaml) with a vulnerability. Now your entire AWS account could potentially be compromised.

Yes, I would use a restricted role for Lambda too. Anything that gets creds in user space gets restricted permissions: EC2, Lambda, ECS, etc.

Some of the AWS built-in roles are an absolute car crash, no idea how they got through review (EMR is a good example). I use the built-in roles by default, but only after thoroughly reviewing the policies, I create my own based on that if I find anything I don’t like.

It’s not restricting amazon’s access that I’m worried about, more privilege escalation (e.g non-constrained iam:PassRole in combination with anything is a good one)