Well, I am sure there is an explanation to that, but it's hard to guess without seeing the logs. For example, this can be the case when VM does not meet the requirements to be processed from storage snapshots. If we see that the only way the VM can be backed up is using standard VADP backup, then we will not consider any settings from that dialog you have mentioned at all, as they are simply irrelevant here. Feel free to open a support case to confirm the reason for sure though. Thanks!