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Im playing a byzantine campaign currently my capital is hit by islam conversion because an imam is standing near the capital, in order to reduce faith conversion is it better to have my orthodox priest inside the capital settlement or standing outside it?
That link is remarkable for the number of directly opposing viewpoints people assert. They can't all be right.
One thing is for sure, priests' conversion effect applies both in and out of cities. I sometimes send 4 or so priests in with a conquering army and you can have a siginificant number of people converted while you're besieging the city.
If there's a difference between inside and outside, it'd be in the ancillaries and/or traits. I don't micromanage my priests to that degree. Simply having a large number of priests following with or behind your armies as they conquer muslim lands will allow you to consistently dominate the college of cardinals.