Hello Sekela,
This issue is indeed related to Windows Server for business environments, specifically Remote Desktop Services (RDS) role servers. It is not related to Windows 365 Enterprise, which is a cloud service.
According to Microsoft’s current documentation for upgrading RDS deployments, the limitation of “two-version in-place upgrades” still applies when the RDS role is installed. That means you can upgrade from Windows Server 2016 to Windows Server 2019, and from 2019 to 2025, but not directly from 2016 to 2025. The supported upgrade path for RDS role servers is explicitly capped at two versions at a time, and this has not changed with Windows Server 2025.
For general Windows Server installations without the RDS role, Microsoft has indeed broadened the supported in-place upgrade paths with Server 2025, allowing larger jumps. However, RDS is a special case because of the dependencies between RD Connection Broker, RD Session Host, and RD Licensing roles. These components require a controlled upgrade sequence to maintain compatibility and avoid corruption of the deployment.
In practice, if you are running RDS on 2016 and need to move to 2025, you will need to first upgrade to 2019, validate the environment, and then proceed to 2025. Skipping directly from 2016 to 2025 with the RDS role installed is not supported and risks leaving the deployment in an unsupported state.
Given your dependency on Microsoft 365 Apps, the best approach is to plan a staged migration: upgrade the RDS servers from 2016 to 2019, stabilize the environment, and then move to 2025 before the support cutoff for Server 2022. If downtime is a concern, consider building new 2025 RDS servers in parallel and migrating user sessions, rather than relying solely on in-place upgrades.
I hope you've found something useful here. If it helps you get more insight into the issue, it's appreciated to accept the answer. Should you have more questions, feel free to leave a message. Have a nice day!Domic Vo.