Using CCC 6, should I choose "Macintosh HD" or just my "Users/myusername" folder as source?

I just bought a new Mac Mini M1 running Ventura 13.6 (22G120) and want to setup Carbon Copy Cloner 6 to backup my computer to an external drive. My destination is a folder within said drive (as I have other files and backups on it). Should I select the whole internal drive "Macintosh HD" or just select the user folder: Macintosh HD/Users/myusername? If I select "Macintosh HD", will I be able to just drag and drop all the applications and settings/preferences if my source SSD were to be formatted to factory settings? If not, then I'd rather save some space on my external drive and just backup the personal files from the Users/myusername folder. Thanks.