I had this same problem. I kept changing it in my instance setting on the website and pulling my hair out that it didn’t take.
I eventually found there was a separate setting in my app. Not intuitive but I got there.
Look for the alternate settings. Mine wasn’t even in the main client settings, it was the per instance setting, but in the client.
For what it’s worth, Time Machine doesn’t seem to care as much which file system it goes to anymore, as long as it goes over SMB.
There are specific config settings to make it work , but nearly all servers , including synology, will have a button that does whatever the magic combo is.