For Bitcoin you have to use BTC or BTC SegWit (if available).
Binance support Segwit address in past few months.
Hello, Since i learnt that this address 12NdNbkdSafXA5AupGn2xEBooYCdQCtP9U belongs to Binance, I am trying to minimize fee by using the correct network fee to withdraw Bitcoin
You want to withdraw your bitcoin from exchange and ask which exchange it belongs to. Weird question.
You can not save withdrawal fee on exchanges because they charge you a same amount of withdrawal fee for any withdrawal amount. You can not customize withdrawal fee.
On the first option Binance Chain (BNB) it said The address does not match the currently selected network, On the second option Binance Smart Chain (BSC) it ask to confirm that the platform you are withdrawing to supports the BSC network?
They ask you, give you that warning because if you move your cryptocurrency cross chain (not only bitcoin), and the exchange you send your crypto to does not support that coin, chain, etc. you will lose your cryptocurrency.