What does "changes to it will not persist across an instance" actually mean in 50-cloud-init.yaml

The "not across an instance" warning means that if you enter changes to the yaml file in an image that still has to perform it's first cloud-init run (on boot), the changes will be overwritten by cloud-init.

Cloud-init is used tot configre stuff on first boot. To that end it changes files on first (and optionally even subsequent) boots. The 50...yaml file is one of them.

Once cloud-init has run a first time on an image, it will not again run those changes.

The warning thus advices not to change the file on raw, unused system images for containers and virtual machines and the like.

By the way, a 'cloud-init clean' command would revert the cloud-init status to "never run before" and so would regeneratie the 50....yaml file also.