Given that the clone was performed properly, if you haven't already reformatted, it would probably be easiest to simply go into Disk Management and remove the D drive letter assignment from that System Reserved partition. Then boot from your new disk and move on.
But if you've already wiped out your target, or just for your general information, disks do not have to be formatted in order to appear in the "Create a backup" tab that you showed in your screenshot, or to be selectable as a destination in that actual clone wizard. Shown below is a completely wiped disk, prior to any initialization, partition creation, or formatting.
Here's how it looks in the "Create a backup" tab:
And shown here is the clone wizard that appears after you click "Clone this disk" under the source disk. In the screenshot, I had clicked "Select a disk to clone to", and as you can see that blank disk is selectable as a target.
But if you want to change drive letter settings, after you click "Copy selected partitions" in the wizard to stage the destination disk, select the System Reserved partition in your Destination and click Cloned Partition Properties to bring up the window shown in the screenshot below. Note in the upper-right corner there's an option to set its Drive Letter to None, although that should already be the default if your source partition doesn't have a drive letter assigned. However, it might NOT be the default if you manually format a partition beforehand and therefore are cloning "into" an existing partition rather than onto a blank disk.