Basically these sort of roles are quite common. For example, a large MNC say Shell wants to work on various projects here. THey don't want to hire permanent staff and hence they want to go through a contracting route. Now MNC companies don't want to deal with multiple contracts for each individual. For example, if they hire 20 contract staff, it means 20x negotiation and contracting basis to deal with. Instead, they would go to a local company which provides contracting staff to the companies. The MNC would agree on a certain rate and treat it as a procurement contract to the contracting company instead of a full time hire staff.

One of the reasons why my previous company (a bank) did this was that our department, which wasn't tech related, couldn't get a tech headcount. We wanted to launch several digital projects and there weren't enough resources within IT to help deliver the project. So we hired contract staff through a contracting company in order to complete the project and get it delivered. Not just tech, but also my UIUX staff as well. Overall, we used them for about 4 years in total.

Back when SAP was really super in demand, these SAP contract staff constantly had the best pick and choice of companies/projects to join and they commanded very high salaries as well.

To be very honest, I was in your position in the past when I was in the SAP field. I decided to decline the offer and continued within my own firm which sort of changed my career trajectory (I am now out of SAP). Whether or not that is better or not, I thought it ended up well overall for me to not take it. I do have ex-colleagues who went through that route and then eventually ending up joining larger firms as a permanent staff as well. They shared with me that the psychological factor of it, is that you need to be strong because here is what you would face every day.

1/ Depending on the contracting company and their contract with the larger firm, if you take MC, it basically you don't get paid because if the contracting company charges by man-day rate, the rates are based on the days you actually work.
2/ Performance has to be consistent and always be delivering. You don't have the down times, meaning you are always held to a higher standard
3/ Depending on the work environment, you might be cast aside and definitely not treated as a staff. Some of my colleagues are happy with that and some of them I have seen taken a toll on them.
4/ Every year is a stressful year during contract renewal period. The ones most stressful is being able to justify your existence and your deliverables

All of the above depends on a number of factors, there are cases where the entire project team is on contract so there is less of a chance to face this.

If you decide to go to a contracting company, please ensure that the company contributes to EPF and to the tax, otherwise you would have another administrative headache of doing that yourself as well.