> the MP5 is objectively better
The Beretta M12 is easily in the top 3 of SMGs ever made when the MP5 isn't anywhere near.
An SMG shtick is controllable full auto fire, which the MP5 isn't anything great compared to many others including much older designs.
The MP5 had a much better success in western police forces (though a lot used the M12) because it's first round is as accurate as you're likely to get a 9mm round out of a 9in barrel which police forces liked as it allow to make precision shots (which is very useful in a police stand off) and have a somewhat decent full auto gun if you need the firepower.
Back when those were only issued to "anti-commando" (anti organized crime/terrorists) units the PM12 was the go to choice, because if you prepare for a firefight against guys with AK or WWII SMGs, that's the gun you want (then they all switched to 5.56 guns).