The Jamf Pro management system how ever will understand what to do and how to install the files from the dmg to a system.
On its own, however, this dmg cannot do anything.
The dmg option will build a standard dmg disk image file, with the payload of the installer as contents. The pkg option will build a standard pkg installer file, which will install with any system that can install pkg files. The standard pkg and the seemlingly standard (but not) dmg. Jamf Composer has always had two formats to build installers.