The help has the details for the backup types, single file, one file per server, one file per server in new format.
The middle option was good as it allowed me to do an rsync of user data on a continual basis and backup all of the virtualmin specific stuff excluding the user home directory data. Now there are only two options and it looks like the secondary option is now only the new format, meaning i have no choice but to include the home directory.
The other confusing part of this is that it is not even recursive throughout the users home directory. This seems to follow the information based on the disk usage for the domain. For example, the total disk usage for that virtual server is 9.10 GB, but the line with 'Home' shows 563.32 MB. I would have expected the check box in the config to include everything within the home directory and total to 9.10 (everything in the users directory under /home).
The help file still has all three options, so I wasnt sure if the new backup screen is correct or if the documentation/help just hasnt been update to include any recent changes.