More info, instance is an empty directory, and there's instances too, with the subdirs below:
$ ls -al /var/lib/cloud total 36 drwxr-xr-x 9 root root 4096 Feb 12 2017 . drwxr-xr-x 52 root root 4096 May 3 23:46 .. drwxr-xr-x 2 root root 4096 May 14 2019 data drwxr-xr-x 2 root root 4096 Oct 14 2016 handlers drwxr-xr-x 2 root root 4096 Feb 12 2017 instance drwxr-xr-x 4 root root 4096 Feb 12 2017 instances drwxr-xr-x 6 root root 4096 Oct 14 2016 scripts drwxr-xr-x 2 root root 4096 Oct 14 2016 seed drwxr-xr-x 2 root root 4096 Oct 14 2016 sem
$ ls -al /var/lib/cloud/instance total 8 drwxr-xr-x 2 root root 4096 Feb 12 2017 . drwxr-xr-x 9 root root 4096 Feb 12 2017 ..
$ ls -al /var/lib/cloud/instances total 16 drwxr-xr-x 4 root root 4096 Feb 12 2017 . drwxr-xr-x 9 root root 4096 Feb 12 2017 .. drwxr-xr-x 5 root root 4096 Feb 12 2017 i-d04c5fc8 drwxr-xr-x 3 root root 4096 Feb 12 2017 iid-datasource-none
More info, instance is an empty directory, and there's instances too, with the subdirs below:
$ ls -al /var/lib/cloud
total 36
drwxr-xr-x 9 root root 4096 Feb 12 2017 .
drwxr-xr-x 52 root root 4096 May 3 23:46 ..
drwxr-xr-x 2 root root 4096 May 14 2019 data
drwxr-xr-x 2 root root 4096 Oct 14 2016 handlers
drwxr-xr-x 2 root root 4096 Feb 12 2017 instance
drwxr-xr-x 4 root root 4096 Feb 12 2017 instances
drwxr-xr-x 6 root root 4096 Oct 14 2016 scripts
drwxr-xr-x 2 root root 4096 Oct 14 2016 seed
drwxr-xr-x 2 root root 4096 Oct 14 2016 sem
$ ls -al /var/lib/ cloud/instance
total 8
drwxr-xr-x 2 root root 4096 Feb 12 2017 .
drwxr-xr-x 9 root root 4096 Feb 12 2017 ..
$ ls -al /var/lib/ cloud/instances
total 16
drwxr-xr-x 4 root root 4096 Feb 12 2017 .
drwxr-xr-x 9 root root 4096 Feb 12 2017 ..
drwxr-xr-x 5 root root 4096 Feb 12 2017 i-d04c5fc8
drwxr-xr-x 3 root root 4096 Feb 12 2017 iid-datasource-none