Dutch 5-year MVV in country of origin passport valid for 3 months
score:5
Accepted answer
The first question belongs on Expatriates, but the second question is arguably on topic here, so I will answer that in a way that also addresses the first question.
The answer is that your residence permit replaces the MVV (which is why the MVV is valid for such a short time; the Dutch machtiging tot voorlopig verblijf means "authorization for temporary stay"). It is not clear why you believe it to be a "five-year" MVV.
The Schengen Borders Code notes explicitly in Article 6, paragraph (1)(b), an exception to the requirement to hold a visa (emphasis added):
they are in possession of a valid visa, if required pursuant to Council Regulation (EC) No 539/2001 ( 5 ), except where they hold a valid residence permit or a valid long-stay visa;
So, as long as your residence permit is valid, you do not need a Schengen visa, you can travel in and out of the Schengen area, and you are not living illegally in the Netherlands.
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Source: stackoverflow.com
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