In my example, the "state" part is someone storing the specific VPC reference to re-apply to a newly re-created lambda. Rather than recreating both the VPC and the Lambda. Many people would refer to that as a bad practice because it's carrying state. e.g., the kind of stuff that terraform puts in .tfstate files.

There's definitely a purist camp that advocates completely stateless infra. Though there's also what you're describing, where some people consider state to only refer to things like databases.