Thanks to @Brian King and the good folks at the bootloader team at IBM, I confirm it's possible to boot Linux on Power on a software RAID-5.
1. In "Storage Configuration" tab select "Custom". Click on Done!
2. On a Manual Partitioning window, delete any previous partitions and create new partitions automatically or manually.
3. Click on the volume group and create new volume group.
4. And then select the RAID1/RAID5.
/boot and PReP partition will always be a standard partition.
And we have an option to use /home and other partitions as RAID 1 and 5.
Note: we can't have /boot and /PReP other than standard partition. And this is similar across other enterprise architectures.