Tiwizi Bank's customer area keeps going down and coming back: servers are being replaced in a loop

Tiwizi Bank is a fictional online bank based in Casablanca. Its customer area (espace.tiwizibank.ma, a Java Spring Boot application) runs on an EC2 Auto Scaling group asg-tiwizi-espace-client behind an Application Load Balancer.

Last night, two changes went out together: version 7.3 of the application (new AMI) and a rewrite of the platform team's Terraform code (“moving to the shared module”). Since 23:00, monitoring shows instances waltzing: Launching, Terminating, Launching… Customers get 503s every other time, and the call center is overwhelmed.

You are the on-call production engineer, with the AWS CLI v2 (region eu-west-1). The application team swears that 7.3 “starts as usual”.