Turns out you can’t specify a custom email address for a new Google Account if the birthday specified during registration is for an underage person. This is due to the parental controls they enforce for kids’ accounts and how that functionality requires a @gmail.com account email address.
During registration you’re asked for name and date of birth:
Entering a birthday for an underage person (younger than 18 years old) will only show a picker for @gmail.com addresses:
However, entering a birthday of 18+ will show a custom email input field:
