NOT Symbol on MacBook Pro 2015 Reboot

I installed my old Apple-branded 250GB HD into my MacBook Pro 15 (2015) and rebooted.

It displayed a NOT symbol.

I used command-R to enter recovery mode and opened Disk Utilities, intending to run Fist Aid.

I selected each item in the righthand pane in order, from the bottom to the top and ran Fist Aid.

It finished in 2 seconds with no errors.

I noticed that the items in the righthand pane looked odd

It has ...

Internal > APPLE SSD SM0256G Media (251 GB), with nothing beneath it

Disk Images > Apple Disk Image Media (2.15GB) > OS X Base System (2.01 GB)

I'm ok reformatting and re-installing Big Sur or Monterey (it won't take anything higher than that)

However, I'm not really sure which one the select and whether its ready to do that properly (not missing something)

Can someone point me in the right direction on how to proceed?