A high-latency network will certainly become the bottleneck, but ONLY for file reads/writes. Metadata attributes (e.g., symlinks, dentries, inodes) are maintained by the file system (FUSE). Caching them in the kernel with ExtFUSE will yield faster metadata ops (e.g., lookups).
What userspace operations do these metadata attribute lookups map to? Listing a directory will incur an S3 list request, so another a network call though I’m not sure how fast that is.
Note, it’s not that the network is slow, it’s that object storages aren’t designed for low latency access (but with parallel reads can serve data at high bandwidth.)