The option in the SCOM Connector install "Use Internal Connector", the internal connector is SCOM’s subscription mechanism. When using it, the connector will wait for alarm updates to be sent to the connector. When that is disabled, the connector will Poll SCOM for updates.
Using either approach is okay – all of the connectors functionality will be available. The only difference
=> With internal connector, the changes will be sent to the connector as soon as they occur.
=> With polling, there may be a lag as the connector may need to wait till the next polling cycle to get the updates. This polling interval is controlled by the "alertPollInterval" parameter and is by default set to 30 seconds. If this delay is acceptable, using the polling mechanism is perfectly fine.
Also, using the internal connector requires the SCOM connector to be configured with an admin user account. Using the polling mechanism does not have this constraint either.