First of all, using non-geodesic option on web mercator or geographic coordinate system generates meaningless circle. The radius would be a non-fixed value depending on the angle. Technically, it's not a circle even though it may look like a circle.
Secondly, the spatial reference of the circle is the same as the center point. If you know the map is under web mercator, the center point should be specified under the same SR.
The reason you are seeing an oval by passing a lat/lon center point under a web mercator map is the generated circle is under geographic CS, and it should look like a perfect circle under GCS. But the map is under Web Mercator, which would make the x axis shorter and result in an oval.