You can choose to break a service into many replicas and put one replica in each rack. With this arrangement, the service has rack diversity. A simple example would be a DNS service where each DNS server is in a different rack so that a rack-wide failure does not cause a service outage.
I think I remember us inadvertently managing to get multiple replicas in the same rack (or at least a reasonably common failure domain at much smaller scale than AZ) from AWS somehow. Highly correlated failures. Was not pleasant.
