Good afternoon. In the Any% category, can I use the map type - Island? I have not seen anyone use this.

From the Rules: • Free choice of map generator settings. Enabling "Peaceful mode" and using a set "Map seed" is allowed.

So yes you can use Island, but there is no point in it unless you want to generate water on the edges, because you play on peaceful mode anyways. However manipulation to have water at a desired position like this seems like a good idea to me indeed.