Hey Noel, I have watched a tutorial made in 2017 that the guy uses exactly the same function and just like you, I was also unable to find the option, but the plugin used to make the particles be emitted only on characters is the “CC Particles Systems II”.
I don’t know the plugins very well, so I can’t see the diferrence between them. But seems the CC particle Systems can emit the particles in the “X” and “Y” axis only.