Business Central on premise subscription vs Business Central Cloud

I think the confusion is around what “Dual Use Rights” actually means.

Business Central cloud subscription licenses provide Dual Use Rights that allow the licensed users to deploy and access the equivalent Business Central on-premises software. In other words, the cloud license gives you the right to use the on-premises version as well; it does not mean that an on-premises subscription can simply be used as a cheaper license for Business Central Online.

Microsoft's current Product Terms show the mapping in this direction: a Business Central Essentials/Premium cloud subscription provides access to the corresponding on-premises version.

There are also important differences between Business Central Online and on-premises. For example, Business Central Online is managed by Microsoft, while with on-premises the customer is responsible for the infrastructure and supporting components. Microsoft also notes that additional environment and database-capacity costs can apply to Business Central Online, whereas these don't apply in the same way to the on-premises model.

Most importantly, Dual Use Rights are non-perpetual and expire when the qualifying subscription expires. They are intended to provide flexibility—for example, during migration, hybrid scenarios, or development/testing—not to provide a cheaper alternative licensing route to Business Central Online.

So I would understand it as:

BC Online subscription → can also use equivalent BC On-Premises rights (Dual Use Rights)

rather than:

BC On-Premises subscription → can use BC Online for less

If you are seeing an on-premises SKU that appears cheaper than the corresponding Business Central Online SKU, I would also check the exact licensing program and SKU. The pricing/licensing models are not necessarily directly comparable.