Traffic manager with multiple endpoints in same location

I'm trying to add web app endpoints from the same location, to an azure traffic manager, when I try to do this, it tells me that App Service will use load balancing to do this for me, when we apps are in the same location.

My understanding is that load balancing is for distributing requests between multiple VMs on one web app. The plan was to use out single DNS and allow traffic manager to determine which endpoint to go to using round-robin or failover. How will load balancing know to direct to one of the web apps from this single address?