The format _should_ be whatever Babylon accepts (gtlf, glb, babylon, obj), but I had to hardwire it for glb for C3 preview mode (since Babylon normally uses file extensions to check format, but in C3 preview mode, the file extensions are obscured due to referencing preview blob urls.)
The conversion to glb does not seem too bad (there are converters out there.) The one pain I have run into is converting fbx models w/ separate fbx animations to glb. I had to load them into blender, combine them together and then export to glb.
These are early days for the plugin experiment. In general it's similar to the released C3 Spine plugin that I have been working on, mainly for render/image, but all physics, game logic, behavior would be done in C3 with another sprite that the Babylon Model is 'pinned' to.
What 3D model formats are you interested in using?