If you are looking for a new Feature Service to be created, then you don't want to choose the "Feature services" option.
Instead, do one of the following:
- Choose the "Surveys" option and then select the survey you want to base the new one off of.
- Or, choose the "File" option and provide an existing XLSX.
In either case, when you hit publish you will automatically create a new Feature Layer (you don't need to tell it to do anything - the process is automated).
You may need to wait until your Connect is updated though, as you likely are seeing a different screen than I have shown above.
EDIT: Since your Connect is so out of date, you may wish to update your XLSForm once you get the newer Connect. The process is simple: Open the survey > click Tools > and click Update XLSForm template (You can also choose Analyze survey to see if there is anything wrong).