Today with the FRR-based BGP implementation, peering with an eBGP multi-hop neighbor does not work because FRR by default only allows 1 hop away.

Option neighbor PEER ebgp-multihop (https://docs.frrouting.org/en/latest/bgp.html#clicmd-neighbor-PEER-ebgp-multihop) allows sessions with eBGP neighbors to be established when they are multiple hops away. Please note that you can set a value between 0-255. Since the MetalLB API does not expose a parameter for this, for now it is fine to leave it unspecified (e.g. defaults to 255).

Setting ebgp-multihop only makes sense when the myASN is different from the peerASN (eBGP case). FRR will in any case ignore if you set it for iBGP peers.