Usually it shouldn't matter, but this is no real passthrough. The VM is still working with a virtual disk and sector sizes probably will be different (like 512B/4K on the host and 512B/512B logical/physical inside the VM. So I would format it inside the VM.
I also had a problem once, where I passthroughed the whole disk that I partitioned on the PVE host and the VM wasn't able to recognize any partitions. Then I partitioned it inside the VM and as a result the host showed it as an unpartitioned disk.