I am trying to create a function app via terraform using the template i have provided below in the git link. Function app is getting created but the app keys are not loading/generated. The function app is not available for deploying functions to it resulting in
Error: Encountered an error (ServiceUnavailable) from host runtime.
I ran into the same problem. In my case terraform apply was stuck on fetching the keys:
data.azurerm_function_app_host_keys.host_key: Still reading... [20m0s elapsed]
Service returned an error. Status=400 Code="BadRequest" Message="Encountered an error (ServiceUnavailable) from host runtime."
When debugging I found that the function app needs to be able to boot to show the host keys. I found it couldn’t start because there was no package uploaded even though WEBSITE_RUN_FROM_PACKAGE=1 was set. Removing the configuration value made the website startup (with the generic “Your Functions 4.0 app is up and running”), and the host keys were displayed.