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(i think) you could use virt-sparsify instead of qemu-img to make final image even smaller
You can, we do this to reduce instance creation time. Though doing this by hand is tedious, that's nothing a good CI pipeline couldn't help with
Is the OpenStack story improved from a few years ago? Experience is mostly AWS - I'm up and running very quickly on AWS but 2+ years ago openstack was kind of a fight.
Deployment of OpenStack or deploying to OpenStack? If you're looking at deploying openstack to on-prem hardward, Juju is a proven ally here: https://youtu.be/bHKiKnlKk_k (Deploying OpenStack with Juju and MAAS)

Disclaimer: on the Juju team

I am biased[1], but the OpenStack story is pretty good. Running it is always going to be more than "apt install openstack" - but there has been pretty good improvements in installers.

Juju (linked below), OpenStack-Ansible, or openstack helm all make deployment possible.

The end user story has been pretty consistent for a while, with additions for newer features, and high performance hardware always in the pipeline.

A lot of the horror stories from the early days were people expecting free, fire and forget ESXi - which it is not.

1 - I have been a project team lead on one of the sub projects for ~ 4 years, and more recently sit on the Technical Committee.

There's also some providers that come with freebsd support out of the box, if you want a less complex setup path https://www.vultr.com/servers/freebsd
I know very well vultr but I prefer OVH. Their infra are in France and no US Cloud Act.
Digital Ocean supports FreeBSD too.

But it's good to document these manual steps so you can port the effort to NetBSD, OpenBSD, SmartOS, etc. (I've had all those run on Linode).

You don't happen to have documented these at all by chance? I am particularly interested in NetBSD.
It's possible to build FreeBSD images for amd64 with nginx and a small but fairly complete base build at about 70 MB by just tweaking src.conf and a MINIMAL kernel with virtio built in. I do this for virtualization on DO, Vultr and my own bhyve machine. YMMV.