Maybe Cloud Functions will be added to
Choosing a Computing Option once it gets out of beta?
In general I would say, that Cloud Functions (almost no control, focus on code) is on the opposite side of Compute Engine (full control, lots of DIY). Compared to App Engine, GCF is "even more serverless", probably more suitable for small jobs, rather than fully fledged web apps / API backends. GAE comes with different scalability options and version/traffic management, and I believe that automated testing and deployment of an app with dozens of endpoints, maybe hundreds, is easier with such features. (Although
Testing and CI/CD is possible with GCF).
On the other hand, if you want to build just a few functions to accompany Firebase, or utility functions for Cloud Storage, or integrate (GCP) resources through Pub/Sub and light-weight computing, then GCF might be the better option.
With the rise of microservice architecture, GCF might become an excellent compute option for microservices, too. However, it's still in beta, and I believe that a few features are missing yet that would go a long way here: Google-managed SSL with custom domains, builtin client authentication, and better control of versions (or traffic migration). AFAIK, App Engine's Task Queue API is promoted to a stand-alone product, Memcache, too. Add Storage and Datastore to the mix and I see that GCF can become a reasonable alternative to GAE in more use-cases.
Of course, a rather different roadmap for GCF could be to somehow merge GCF with its cousin from the Google apps family, Google Apps Script, but I don't expect that to happen.