Hi @RJBreneman ,
The best practice is to configure auto-scale for App Service based on a threshold e.g. 70%-80% CPU/Memory utilization before the App Service Plan is overloaded. You can arrive at a threshold by monitoring the App Service plan,
But to answer you question on scale out using custom metrics like request/service failure, below are few options:
One way to scale out using custom metrics is by enabling Application Insights for the App Service as described here https://learn.microsoft.com/en-us/azure/azure-monitor/autoscale/autoscale-custom-metric
Application Insights also has standard metrics that include count of failed requests https://learn.microsoft.com/en-us/azure/azure-monitor/app/standard-metrics#failure-metrics
To scale out using Azure Functions, you can try to write a powershell function as per this link https://learn.microsoft.com/en-us/azure/app-service/scripts/powershell-scale-manual