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Does every user need a licence?

There is nothing to assign per person. Out of Office Assistant follows Atlassian's standard licensing model for Cloud apps: one subscription covers every user on your Jira site, at the same user tier as Jira itself.

The app does check that the subscription is valid before it acts. Without a valid one its controls are locked or hidden, scheduled jobs stop, work items are no longer reassigned even where a rule is active, and the Out of Office section on a work item shows an unlicensed message.

The subscription is handled by Atlassian, so a lapsed one is fixed in Atlassian Administration rather than in App Settings.