iirc, custom DNS at CF refers to using your own subdomains as name servers for CF instead of the regular *.ns.cloudflare.com. Basically a form of whitelabelling.
Specifying 3rd party name servers as your domain’s name server was (still is?) not possible with Cloudflare Registrar.
Specifying 3rd party name servers as your domain’s name server was (still is?) not possible with Cloudflare Registrar.
(Disclaimer: I work there)