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Yes, the virtual keyboard or BT keyboard is only for ebook annotation. The Advanced Notebook is bought in Nebo (see iOS & Android) and doesn't work with touch/virtual keyboard on Kobo or iOS. The free iOS version is more limited, the paid iOS version a bit fancier. Needs maybe at least 2018 iPad and compatible Pencil for iOS (3rd party Ciscle is 1/8th price of Apple Pencil and works). Nebo needs an iOS or Android gadget that has a true digitizer with compatible stylus/pen/pencil, not a fake rubber tip stylus.
I can't see Kobo doing epub annotations doing handwriting conversion (Advanced Notebooks is a bought in App) and export would be of no more value than exported screen shot (images are useless). So stick to keyboard (Virtual or BT) for ebook annotation.
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