Installing Windows on External SSD on MacBook Pro
I think you have a misconeception of how BootCamp and virtualization works.
BootCamp: Only on Intel Macs!
With BootCamp you can install Windows on your Mac. The guide you mentioned shows how to install it onto an external drive, since usually Apple only suggests partitioning your internal drive and installing Windows there.
After installing Windows on that drive or internally you have to shutdown your mac and press cmd + opt while starting up to access the boot menu and select the external drive, i.e. Windows. You will then only run Windows and can't switch back to macOS unless you shutdown Windows and restart into macOS.
With BootCamp you are running Windows natively on the Mac, i.e. your Mac basically works the exact same way as an equally spec'd &quot;original&quot; Windows Laptop. I.e. all hardware (including 16GB RAM) will be used. This is also the reason why you cant run Windows natively on an M1(ARM) Mac because it is written for x86 and not ARM.
Virtualization
There are multiple programs like Parrallels VMWare,... that allow installing a so called virtual machine. This virtualization allows you to run windows inside macOS, i.e. you basically have access to macOS and Windows at the same time. Windows will run in a seperate window, but if you make that fullscreen it looks like you are only running Windows.
However, since you are running Windows virtualized on top of macOS you have to assing a certain amount of RAM, CPU Cores,... to the virtual machine. This creates performance losses. In this case you would actually not be able to use all 16GB of RAM on Windows (but thats not what they explain in the linked article).

To briefly answer your questions:

If I do not have the SSD plugged in, will I be able to login to my MacOS smoothly?

Yes. You will simply boot into Mac and since there is no other startup device you dont have to choose macOS in the boot menu. Simply hit the startup button.

How much of the RAM will the windows use when run using the SSD? all 16 gb?

If you go the BootCamp route Windows will use all 16GB of RAM.