Azure Static Web Apps: The ‘FUNCTIONS_WORKER_RUNTIME’ setting is required. Please specify a valid value.

TL;DR You need to create a local.settings.json file with the FUNCTIONS_WORKER_RUNTIME setting.

Nice simple one this to remove this warning message when running Azure Static Web Apps locally create a local.settings.json file in your api folder and add the following:

{
  "IsEncrypted": false,
  "Values": {
    "FUNCTIONS_WORKER_RUNTIME": "node"
  }
}

This also deals with several other issues the API has with being node, like not knowing what type of build to use.

TL;CR You need to create a local.settings.json file with the FUNCTIONS_WORKER_RUNTIME setting.