Why does AWS Lambda function always time out?

You have a typo:

context.callbackWaitsForEmtpyEventLoop = false;

should be:

context.callbackWaitsForEmptyEventLoop = false;

---

Here's what the documentation says about the behavior of callbackWaitsForEmptyEventLoop:

callbackWaitsForEmptyEventLoop

The default value is true. This property is useful only to modify the default behavior of the callback. By default, the callback will wait until the Node.js runtime event loop is empty before freezing the process and returning the results to the caller. You can set this property to false to request AWS Lambda to freeze the process soon after the callback is called, even if there are events in the event loop. AWS Lambda will freeze the process, any state data and the events in the Node.js event loop (any remaining events in the event loop processed when the Lambda function is called next and if AWS Lambda chooses to use the frozen process). For more information about callback, see Using the Callback Parameter.

Minimal example:

// Times out due to typo
exports.function1 = (event, context, callback) => {
    setInterval(() => console.log('Long wait'), 100000);
    context.callbackWaitsForEmtpyEventLoop = false;
    callback(null, 'Hello from Lambda');
};

// Returns successfully
exports.function2 = (event, context, callback) => {
    setInterval(() => console.log('Long wait'), 100000);
    context.callbackWaitsForEmptyEventLoop = false;
    callback(null, 'Hello from Lambda');
};

If anybody was confused like I was with how to add callbackWaitsForEmptyEventLoop to new Alexa projects that look like this:

const skillBuilder = Alexa.SkillBuilders.custom();

exports.handler = skillBuilder
  .addRequestHandlers(
      GetNewFactHandler,
      HelpHandler,
      ExitHandler,
      FallbackHandler,
      SessionEndedRequestHandler,
  )
  .addRequestInterceptors(LocalizationInterceptor)
  .addErrorHandlers(ErrorHandler)
  .lambda();

Example project found here: https://github.com/alexa/skill-sample-nodejs-fact/blob/master/lambda/custom/index.js

This solution worked for me:

// create a custom skill builder
const skillBuilder = Alexa.SkillBuilders.custom();

exports.handler = (event, context, callback) => {
  // we need this so that async stuff will work better
  context.callbackWaitsForEmptyEventLoop = false

  // set up the skill with the new context
  return skillBuilder
    .addRequestHandlers(
      GetNewFactHandler,
      HelpHandler,
      ExitHandler,
      FallbackHandler,
      SessionEndedRequestHandler,
    )
    .addRequestInterceptors(LocalizationInterceptor)
    .addErrorHandlers(ErrorHandler)
    .lambda()(event, context, callback);
}