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I've set up Borg on a Synology NAS and it appears to be working fine.  A possible reason it is failing is that I have Borg 1.1.5 installed and XSIBackup indicates it is compatible with version 1.1.1.  My version of Borg is from the SynoCommunity and is installed from the GUI.  I would have to see if I can down-rev to 1.1.1, but I would at least ask before I start tinkering.

Backups from XSIBackup produces the following output (truncated with just relevant info):

[Test] Starting Borg backup
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Queued: /tmp/Test.vmx ---------------------------------------------------------------------- 3.0K
Queued: /tmp/Test.vmsd --------------------------------------------------------------------- 43
Queued: /tmp/Test.nvram -------------------------------------------------------------------- 8.5K
Queued: /vmfs/volumes/rackstation/Test/Test-Snapshot2.vmsn --------------------------------- 19.7K
Queued: /vmfs/volumes/rackstation/Test/Test.vmdk ------------------------------------------- 470
Queued: /vmfs/volumes/rackstation/Test/Test-flat.vmdk -------------------------------------- 40.0G
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TOTAL: 40G
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Examining borg repo [/volume1/Borg/backups]...
Adding queued files to Borg repo [/volume1/Borg/backups]:
FIPS mode initialized
sh: borg: command not found
524KiB 0:00:00 [1.21MiB/s] [>                                 ]  0%
Files total (bytes): 42949705437
Packed size (bytes): FIPS mode initialized
sh: borg: command not found
(*) It is normal that the packed size is slightly bigger than the sum of the files
  File "<string>", line 1
    if FIPS mode initialized
               ^
SyntaxError: invalid syntax
[Test] error: /volume1/Borg/backups::1541977661 - IBCA-ESXi.IBCA.Com - Test :::  repository integrity check failed
[Test] error details:
FIPS mode initialized
sh: borg: command not found
The ESXi configuration was saved to "192.168.123.41:22:/volume1/Borg/backups"
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Errors detected in backup, check logs
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Backup finished