Service provider Azure light house design for MS sentinel with multiple identities

pavankemi First, you only need Azure AD P1 to use MFA (Azure Active Directory Pricing | Microsoft Security)   

In regards to M365, it is up to you, but I would think that having your own instance would be much better than relying on your customer's instance since that would require your customers to create accounts for you and each analyst could potentially have multiple accounts they would need to check. As to what license level you would need, it would all depend if you are planning on using the extra security tools that the E5 license would provide (which you probably should to make sure your tenant is as safe as possible)

As far as the B2B is concerned, having your customer inviting your analysts to their Azure AD would suffice unless their ITSM does not use Azure AD