VDI - Server OS presented as desktops? Why? ELI5

Hi all I am trying to understand a conversation I had regarding VDI as it's not an area I know anything about.

In short - they use Citrix. They take full servers and present them to users as desktops. Users think they have Windows 10 but really it's Windows Server.

Is this normal operation for VDI? Or is this just a different way of doing things? I thought they could use actual windows 10/11 images.There was a hint it was to do with licensing?

Can anyone articulate the way it works? Or have I misunderstood?