Microsoft does expect a external harddrive for that and therefore does not list drives that do not identify them self as such a storage.
You can configure a network share as destination in the advanced options (at least with my WIN Pro), but you have to enable the network detection and file sharing for the destination. Just follow the steps microsoft is asking for, if you want to give this a try.
I did not do that, and therefore I cannot say if this will work then, but I do not see that this will run at least stable.
I recommend a 3rd pary software.
(What tool do you use to automatically unlock your cryptomator vault and sync the files in your vault with the local copies of those files?)