Ransomware will often leave computers untouched if they have a Cyrillic keyboard layout, because aggravating authorities in your own country is orders of magnitude more dangerous than aggravating foreign authorities.
Theoretically, the NSO group might feel the same way.
If I remember correctly every sale of Pegasus requires an export license and is therefore subject to approval by the Israeli govt. They don't seem to care much for human rights activists and journalists but assuming every unpatched smartphone is vulnerable, it's very unlikely they're going to allow sales if it could just be pointed at any member of the Israeli govt or military.
Does Israel even have laws against spying on its own citizens? If not, or very weak one, it's hard to imagine it wouldn't want to spy on them, especially any political opposition.
Why not? NSO Group is willing to sacrifice the lives of others for profit, so who’s to say that NSO Group would shy away from that?