The Veeam PVE backup plugin is made by the Veeam, a $2bln company with a well established support organization and even a free support forum.
That said, the wizard states that it is looking for "snapshot storage". "Snapshot" is a general technology name". In this particular context it refers to storing changes while backup is in progress. The changes are stored as file chunks. As you noticed only your FILE storage is suitable for this need.
So, to summarize, this wizard does NOT limit your ability to backup LVM or other Block technology.