Hi @swamidass
I started writing this response a day or two ago but got sidetracked…
As per Can Netlify Functions share cache/memory? - #2 by jonsully
AWS Lambda functions are made to not persist memory across runs.
and Netlify Function response caching - #3 by hrishikesh
Function responses are not cached in the CDN, so the requests that you’re seeing are all uncached.
Therefore a function cannot (as per my understanding) return a 304 as there is nothing for it to compare against if the function itself is generating the returned PDF.