My initial reaction on Funderburk was similar, but upon thinking about it more, Paddack's best pitch is his changeup, and he has reverse splits for his career. I could see him being a sneaky option against the lefties in the middle innings. For that matter, Varland also has reverse splits so far in his career, and his changeup was his most effective pitch as an MLB starter (though it's a short track record). As a reliever he's gone more to the cutter and I'm not sure his changeup has quite the depth that Paddack's does, so I think Paddack would be more likely to be utilized in that way. That said, I could see roles for both Paddack and Funderburk.
For a 5 game series with two off days, 12 pitchers is still a lot, and 13 would definitely be overkill, so I think Stevenson stays on the roster, and I think there will be pinch running situations in the ALDS.
I really don't know who I want to drop out of the bullpen though. Funderburk seems like the most likely based on how this team usually values experience for these decisions. I'm not sure Varland's spot is actually totally safe either, even though he seemed to be the 5th option in the wildcard round, they might make a different decision matching up against Houston. It's a very tough call to me.