In the endstop dropdown for the Z axis, choose nothing. You'll define the Z probe in the endstops page.
In the Z-Probe section you would choose zprobe.in as the input pin for the bltouch that takes the trigger signal. And the PWM control pin that you want to use for servo control to raise and lower the pin. Usually Heater3 on the expansion header. As you've described.
Then on the endstops page you choose bltouch as the probe and probe for the z axis.
Probe configuration is a bit disorganized in the current version of the tool. It really should have it's own tab with all of the relevant settings there I think. It's complicated though because there are many different kinds of probes that require very different ways of wiring and configuration.