It seems that various and redundant terminology (and how the user interface presents them) was source of some confusion.

Clicking that "Disk 1 box" did offer "Convert to Dynamic Disk" and "Convert to GPT". These are options to change the format of "partition table", aka "disklabel".

What is "partition table"? It is stored at the start of the disk, right after, or as part of MBR (Main Boot Record). During boot the BIOS reads bootloader from MBR, and bootloader reads rest of OS data from start of a partition. But in order to know which LBA (Logical Block Address) is the start of partition, bootloader (and OS) has to check a list of defined partitions. Partition table is that list. It is in known location and format. But there are more than one format used for partition tables, and support for various formats depends on BIOS and OS.

Changing partition table format doesn't actually cause neither harm nor good for a secondary disk. So no point doing anything there now.

One the right (on pictures) there are two boxes for Disk 0 and one for Disk 1. Those are partitions. But interface calls them "Volumes". Running "Delete Volume ..." for the box that did show "RAW" did nothing more than removed one entry from the partition table. "Creating new volume" adds entry to the partition table.

When the box said "Unallocated", it was representing the part of disk (LBA's) which was not included in any defined partition.

Partition has no data. It is just an address. When Windows started, it saw a partition, assigned a drive letter for it, but since there was no data within, it called it "RAW". You could as well have a foreign filesystem in the partition with real data in it, but Windows would still call it "I have no idea what garbage that is".

"Formatting" initializes a filesystem. Writes the metadata of a filesystem on the disk. And it makes sense to write within LBA's on a partition. Once there is (NTFS) filesystem data on the sectors, Windows can say: "Hi volume, I see your root directory and whatever files you have, I'll show you as disk volume to the user with the drive letter I (or the user) has decided."