If you’re not going to point a share at the destination dataset it shouldn’t matter, as this can be changed later.
when you select smb during dataset setup it will default the dataset to case insensitivity and set ACL permissions. If you select generic, you can still assign ACL permissions later.
I believe those settings will be changes based upon the advanced options you set in replication. In replication you can choose to make the destination dataset accept the settings of the source, or adopt the settings of the destination.
It really shouldn’t matter, if you are just replicating for a backup, as opposed to replicating to access the replicated data on the destination.
For consistency’s sake I would suggest selecting SMB. This way there is less configuration later, if you want to access the dataset as an SMB share. Conversely, if you might want to access the destination dataset as an NFS share, then you might consider leaving it as generic.