Dropbox - move folder to a supported location

I have received warning that Dropbox will not synch to My Passport SSD starting in November - I am utilizing this as my primary file storage for photography on my MacBook Air due to limited storage capacity.

Further info is as follows -

What is my next step - move it back to main hard drive (after reducing files on my passport( and then reformatting? How do I get it to be HFS+ or APFS ?

Thanks!