Exchange SE (ESE) RTM coexists with E2016/E2019 no problem. So take the direction that is easiest for you.
But something else you said: "1x Exchange Server 2016 - Powered off and powered on for patching (no Services, no smtp services, no mail - all mailboxes are in Exchange Online) - my understanding exchange server needs to exist for management purposes only and can't be fully removed as long as we are AD Hybrid?"
Actually that ^ is not the case. You can be "serverless" if you installed E2019 / ESE RTM management tools and then ran the cleanup script. This will allow you to manage your recipients (but through PowerShell only) without having a server at all. Management tools can be installed on a Workstation even. The article that talks about all that is here: Manage recipients in Exchange Server 2019 Hybrid environments | Microsoft Learn