Can this component be used with a Hosted OS or does it need to be on-prem?
Related: could we use to communicate with onprem or Cloud hosted AD to create new domain users?
You can use it in Outsystems cloud and in a private / onprem deployment. Using it in the outsystems cloud limits its function to the user rights of IIS_USER. On private / onprem deployment you can crreate a user with sufficient rights to do wat you need to do and use that impersonation on the execution of your commands.
Just be carefull if you have multiple instances. your commands will only be run in one machine, so some additional logic is needed when using it on a environment with multiple instances.