Follow these guidelines to help you choose the package you need to install.
When developing Azure Functions you can choose different runtimes.
The recommended approach is to use v4 runtime with net6.0 and version 3.x of FakeXrmEasy.Core.{vDataverseVersion}.
If you need to support other applications using CrmServiceClient, then you’ll need to use version 2.x and the v1 runtime.
The new DataverseClient is the recommended approach, as well as using the new async capabilities of that SDK and that can also be used in FakeXrmEasy.
Checkout the samples repository which contains samples about how dev & test using an azure function. Also check out the video down below which explains how to organize your project structure so you can use Azure functions along with Plugins and other backend code in a test project.
There is a specific sample repo with several scenarios about testing azure functions along with plugins and pipeline simulation here to get you started.