What you hear is probably correct.
'Note that ě is not a separate vowel. It simply denotes [ɛ] after a palatal stop or palatal nasal (e.g. něco [ɲɛtso]) and [jɛ] after labial consonants (e.g. běs [bjɛs]).'
(Copied from Wikipedia article on Czech phonology, you can check the whole article here: https://en.wikipedia.org/wiki/Czech_phonology)
You can check the pronunciation here: https://cs.forvo.com/word/cs/m%C4%9Bsto/#cs
Hope it helps and happy learning! :)