The FreeNAS guide 11.6.2., Client Time Machine Configuration, appears to leave out a step in the procedure to connect a Time Machine client to a ZFS dataset for Time Machine.
It currently says, "click ON and a pop-up menu shows the FreeNAS® system as a backup option."
It should say something like, "click ON. Then, in the right pane, click the "Select Disk…" button. A pop-up dialogue shows the FreeNAS® system as a backup option." Then the remaining text applies as-is.
Observed in 11.2-U5 edition of FreeNAS guide.