Yes, MNE can be used to create mailboxes in a hybrid configuration with Office 365 including an on-prem Exchange server. The following parameters will need to be added to the MNE Global Default Settings:
[Exchange]
DirSyncEnableRemoteMailbox=1
LocalExchangeFederationServer=<FQDN>
Additional information about these parameters can be found in the MNE Program
Parameters Reference in the Documentation directory of the software download
on pages 43 and 47.
Additionally, if you would like MNE to use a custom SMTP domain when it sets the "targetAddress" for each user on the on-prem hybrid Exchange server, then you can add the following additional parameter:
[Exchange]
RemoteMailboxRoutingAddressDomain=custom.domain
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