Most plugins use the Reference System of the project.
To determine the choice of units to use, the Heatmap Plugin you use looks at the Reference System of your project. In your case it finds out it is EPSG:4326 (as you can see in the lower bottom of your QGIS window), which is WGS84.
Since the WGS84 Reference System is not projected, it uses geographical coordinates (lat and long) which are expressed in degrees.
degree unit you are proposed.
To change Reference System of your project, click on the
EPSG:4326 label on the bottom right of the QGIS window, and select a projected system.
Then try your Heatmap plugin again.