To answer your question...
If your drives were manufactured after Jan 2012 then they are likely 4K sector clusters so you should select 4K.
If you know your drives are 4K then you should select 4K to ensure the software runs in the most compatible mode.
If your drives are 512byte sectors then you have a choice of 512bytes or 4K sectors and here is what that means...
The data is stored on your hard drive in 512byte chunks. This means if the data being stored is smaller than 512 bytes then only one sector will be consumed for data storage (over simplified of course). It the data stored is 600 bytes then two sectors are used which is 1024 bytes and approx 400 bytes are wasted. These 512byte chunks also make reading and writing faster for small data sizes while slowing down reads and writes for really large data sizes (think 500 MB) where there are thousands of these small reads/writes.
If you are storing large files in general then 4K sector sizes will allow fewer head movement as it needs to read fewer 4K clusters of data to read that say 500 MB of data however if you are storing a lot of small files then you waste a ton of space. Lets take that 600 byte file and it's now stored in a 4K sector. That is a lot of wasted space. Nope, you cannot add data into that extra space, doesn't work like that.
Last part, honest. Now we throw in a huge drive size like 2TB and yes you could populate it with 512byte sectors but there is something called a FAT (File Allocation Table), a map of where your data is. This map is huge if it must point to 512 byte chunks which also adds to slower speed because the drive needs to access that FAT more frequently. If we make that 2TB drive all 4K sector size then that is a significantly smaller FAT only because it points to fewer number of sectors on the hard drive, not because the FAT is in 4K itself.
Well I hope that isn't clear as mud. I left out that a 4K drive will typically look like a 512byte drive to all computers by default. This isn't in all cases but it's almost a sure bet in most cases.
If you need further clarification, please ask.
My advice... If you have smaller drives (1TB or smaller) and they are not 4K sector drives, I'd recommend using 512bytes only for compatibility reasons, you could select 4K and it should be fine. If your drives are 4k sector drives, use 4K to speed up your drive reading and writing operations. This doesn't mean you will see a performance difference with this project but it is the best practice.
There is more behind the scenes work going on that I'd rather not get into but this should get you close to understanding the hardware and what 4K means.
