AWS has a more powerful abstraction already, where you can condition permissions such that they are only granted when the request comes from a certain VPC or IP address (i.e. VPN exit). Malware thus exfiltrated real credentials, but they'll be worthless.
I'm not prepared to say which abstraction is more powerful but I do think it's pretty funny to stack a non-exfiltratable credential up against AWS given how the IMDS works. IMDS was the motivation for machine-locked tokens for us.
There are two separate concerns here: who the credentials are associated with, and where the credentials are used. IMDS's original security flaw was that it only covered "who" the credentials were issued to (the VM) and not where they were used, but aforementioned IAM conditions now ensure that they are indeed used within the same VPC. If a separate proxy is setup to inject credentials, then while this may cover the "where" concern, care must still be taken on the "who" concern, i.e. to ensure that the proxy does not fall to confused deputy attacks arising from multiple sandboxed agents attempting to use the same proxy.
