Advice seems to be 'only use it with external drives' and then every time you plug the drive in it wants the password.
Once or twice a year it gives a verify error (i imagine this is because a plug gets pulled halfway through a backup on one side or the other), and I just have to go find the last verified date, zfs rollback, and then re-verify. Afterwards it picks up where I left off, and the historical backups are preserved.
Wish it didn't require this extra effort in the first place, but much better than having to nuke and pave every time.
Even better, it's working great over Tailscale so I can even use it remotely. Only big hiccup I ran into was figuring out some ZFS setting about quota vs refquota (something like that) to have the Time Machine's (artificial) space limit match the ZFS quota so that Time Machine would prune the oldest backups appropriately (otherwise the ZFS snapshots took up an unpredictable amount of space and Time Machine would unexpectedly get out of space errors before hitting its space limit).
Side note, Synology is dead to me. Synology became consumer hostile with trying to force you to use their drives, they don't have good small scale M.2 options(at least as of last year when I upgraded), and their stuff doesn't even work for me reliably.
Counter Anecdote: it "just works" for me over SMB, I'm using a Synology DS119+ with a hard quote on 3x my laptops drive size though.
I have run out of disk space on the NAS before though, and that's an annoying pop-up.