Looks like your disk in the image is MS-DOS partitioned. Your next partition should be an extended partition since you are limited to 4 primary partitions and if you make another primary partiton, that will use them up. Whether the automatic partitioning will account for this, I don’t know. You could try and see what it proposes.
But, Using “something else” option will allow you to shrink your sda3, create a new extended partition and then 1 or more logical partitions inside that for the new OS and other further expansion.