May we allocate Microsoft 365 E3 licenses to our function users?
Function users represent generic user groups – such as trainees – to whom you want to give access to certain software applications. In this case, it makes sense to work with device-based licenses. However, Microsoft 365 is, apart from the educational area, a purely user-based license (named user) which cannot be used for function users.
Sources: Microsoft Product Terms, March 2020 Licensing Microsoft 365_2018-01-22