Nozip flag ignored

I'm developing Azure Function App and I have to run it no from the package because I need to write temporary file to file system.

I've tried all automatic deployment methods known to me, vs code Azure Function deployment, azure functionapp publish with and without --nozip flag, and Git Action deployment.

None of the methods seem to deploy to d:\home\site\wwwroot

vs code Azure Function deployment UI does not even ask, ands and sets WEBSITE_RUN_FROM_PACKAGE to 1.

func azure functionapp publish textjoint-api --nozip does not do anything about the flag, reports successful deployment, reports success and leaves the files in C:\home\data\SitePackages without moving them to d:\home\site\wwwroot

PS C:\Projects\textjoint-api> func azure functionapp publish textjoint-api --nozip
Getting site publishing info...
Creating archive for current directory...
Uploading 101.77 MB [#############################################################################]
Upload completed successfully.
Functions in textjoint-api:
    upload - [httpTrigger]
        Invoke url: https://textjoint-api.azurewebsites.net/api/upload

An this is true for no matter if WEBSITE_RUN_FROM_PACKAGE exists or set to 1 or zero

Same with Github Action deployment.

Also noticed that when I flip (or remove) WEBSITE_RUN_FROM_PACKAGE and look at the files view Azure portal or VS Code, I see different version, of the source code, which is probably expected. Proofs that the flag works.

Another observation, Logs in Deployment center show the following:

Updating submodules.
Preparing deployment for commit id 'c07e2304a0'.
Skipping build. Project type: Run-From-Zip
Skipping post build. Project type: Run-From-Zip
Triggering recycle (preview mode disabled).
Deployment successful.

Notice Project type: Run-From-Zip which is not what I would expect with --nozip flag.

Context: Windows Azure Function App / Consumption plan. Runtime version: 4.19.0.20414 Location: Germany West Central Node ~18

setting.json (afaik affects vs code azure plugin behavior)

{
	"azureFunctions.projectLanguage": "TypeScript",
	"azureFunctions.projectRuntime": "~4",
	"azureFunctions.validateFuncCoreTools": true,
	"azureFunctions.defaultFunctionAppToDeploy": "textjoint-api",
	"azureFunctions.showDeployConfirmation": false,
	"azurite.debug": true,
	"debug.internalConsoleOptions": "neverOpen",

}

az --version:

az --version
azure-cli                         2.48.1

core                              2.48.1
telemetry                          1.0.8

Dependencies:
msal                              1.20.0
azure-mgmt-resource               22.0.0

For testing created new Function App: 'textjoint-fresh-api'

• Removed WEBSITE_RUN_FROM_PACKAGE
• Set AzureWebJobsFeatureFlags to EnableWorkerIndexing
• Deploying from the same codebase using func azure functionapp publish textjoint-fresh-api --nozip

First run:

Getting site publishing info...
Creating archive for current directory...
Uploading 101.77 MB [#############################################################################]
Creating archive for current directory...
Uploading 101.77 MB [#############################################################################]
Creating archive for current directory...
Uploading 101.77 MB [#############################################################################]
Error uploading archive (Conflict).
**Server Response: The 'Preparing zip package' operation conflicts with the pending 'Performing continuous deployment' operation started at 2023-04-27T18:44:47.2095770Z.  Please retry operation later.**
PS C:\Projects\textjoint-api> 

Log entry in Azure Portal Deployment Center:

Updating submodules.
Preparing deployment for commit id '31bfd81f17'.
Generating deployment script.
> Using the following command to generate deployment script: 'azure site deploymentscript -y --no-dot-deployment -r >"C:\local\Temp\zipdeploy\extracted" -o "C:\home\site\deployments\tools" --basic --sitePath "C:\local\Temp\zipdeploy\extracted"'.
Running deployment command...
Running post deployment command(s)...
Command: "C:\home\site\deployments\tools\deploy.cmd"
>Handling Basic Web Site deployment.
>Creating app_offline.htm
>KuduSync.NET from: 'C:\local\Temp\zipdeploy\extracted' to: 'C:\home\site\wwwroot'
>[list of files]

Triggering recycle (preview mode disabled).
Deployment successful.

All right, files are in place, confirmed via kudu, but the function is not discovered, not listed under functions in Azure Portal. "main": "dist/functions/*.js" in package.json present. Problem for another day.

Content of C:\home\site\deployments\tools\ for both is identical. c:\home\LogFiles\eventlog.xml' screams about Failed to open siteversion.txt. ZipFS setup failed. Error: 0x80070003andFailed to copy zip from remote source.`.

My apologies for long-winded description, that was long-winded attempt to get anything work.

What should I check and try next?

BTW: it took me another day to understand that the flag is ignored. Because they you start to talk to fs from package deployment function fails silently without any indication of the problem, and logs are are inconsistent probably because to they are not flushed on time. Took me ages to zero in exact problem. Not ideal.