Simplified security settings management is now generally available

MagicHair  The rationale is that we've built experiences that match the operational and technical maturity of our customers. A small-medium business doesn't have the same needs, security expertise or resources as large organizations - and for them we recommend the simplified Defender for Business capabilities.

Regarding mixed licenses, please refer to this preview feature which will solve the issue: Manage your Microsoft Defender for Endpoint subscription settings across client devices (preview!) | Microsoft Learn
Settings management is currently out of scope for domain controllers - and its all documented here, as well as licensing considerations: Use Intune to manage Microsoft Defender security settings management on devices not enrolled with Microsoft Intune | Microsoft Learn