Idk how an AWS region would respond to a power outage, but i have tested this in AWS Outpost, and there, if you power down a rack, then power it back again, the baremetal instances will not be recreated. (I was surprised as I was expecting the EC2 health check to terminate them, but it does not work like that.) My understanding is that if you stop/start an instance, your local storage is gone (as the instance might even end up in a different host), but if you just reboot the instance, it should keep the local storage.