It is up to the municipality to tell them where to host it. If you go there with no demands or restrictions they will take the easiest route and setting up a new mailserver is just really simple with exchange online. Additionally every license sold is a bit of MRR. So the incentive is quite high to sell m365. But it is up to the client and if the msp pushes too hard I'd go and look for another msp to be honest.
It is up to the municipality to tell them where to host it. If you go there with no demands or restrictions they will take the easiest route and setting up a new mailserver is just really simple with exchange online. Additionally every license sold is a bit of MRR. So the incentive is quite high to sell m365. But it is up to the client and if the msp pushes too hard I'd go and look for another msp to be honest.