I struggled to find any reference in the documentation to:
[build]
functions = 'directory-here'
However based on this post I believe that it’s the legacy way of performing:
[functions]
directory = 'directory-here'
As that post mentions, you should only need to specify it if the functions directory is not the default one, and the Express on Netlify documentation seems to assume the default directory is used.
You can provide feedback on the documentation with the forms at the bottom of the pages:
In regards to the files that are deployed, Netlify deploys the files that are in the Publish directory, if that directory contains source files, then source files are deployed.