Let's look at the output of
Entity["PhysicalSystem", "RectangularBarMagnet"]["MagneticScalarPotential"]
The output will look fairly normal, but if you inspect it closely, you'll notice two things.
(1) "Subscript[M, 0]" is not actually a simple variable. Mouse over it. It's a "QuantityVariable". More specifically it's actually:
QuantityVariable[Subscript["M", 0], "Magnetization"]
You need to divide by that and not Subscript[M, 0].
(2) The expression contains Inactivate. Inactivate is a more modern way of stoping something from evaluating than using Hold. Use Activate to remove the Inactivations.
Activate[Entity["PhysicalSystem", "RectangularBarMagnet"]["MagneticScalarPotential"]/QuantityVariable[Subscript["M", 0],"Magnetization"]]
