That's fine, as long as you have a wal archive. Although I don't know what is "Incremental" about it. If you upgrade to a version which wasn't quite so ancient, you could use pg_basebackup.
Should it use rsync or pg_dump instead?
rsync is dangerous if not used with great care, and probably isn't going to get you much for just doing a backup.
pg_dump is also fine, but it does something different, it creates a logical backup, not a physical backup. The backup from pg_dump cannot be used to seed a PITR or streaming replica. On the other hand, it can restored into a database from a different version and different architecture. And with pg_dump the pg_start_backup and pg_stop_backup are useless and confusing.
