Can someone tell me how Netscaler licensing works with the new Citrix Hybrid Cloud licenses on-premises?

As Richard mentioned, you'll need to point your on-premises NS's to either Netscaler Console service, either direct or via ADM agents, or an on-prem MAS/ADM/Console (yay renames) instance. From there you assign licenses akin to the pooled licensing process. Ie. Add NS as a managed device, configure NS to look to service or on-prem Console (again, either direct or via agent for both), assign instance license and assig bandwidth license in Console.

Andrew Scott has a couple of good writeups on how to deploy the new licensing https://netscaler.substack.com/

Its all described here: https://www.citrix.com/blogs/2024/09/11/citrix-universal-for-csp-weve-transitioned-now-what/ There are also links to the docs embedded. Luckily I already have all our customers VPX onboarded to Console service.