I found the answer, and it was the most obvious, of course.
The SMS pause button is configured as the Port 1 Start button in retroarch, so whatever input I bin to Port1 Start does the job. Fortunately this still works if I have the input type as Light Phaser.

Hello All,
I'm dealing today with the same issue but my investigation shows so far that for me it is only related to PAL MD games

I opened a separate threat here with some more research : https://retropie.org.uk/forum/topic/34696/megadrive-50hz-games-with-genesis

The problem that I have if I use 1980 x 1020 @ 50Hz is that the monitor for whatever reason has black borders all around and I experience this on PI4B

Yeah I wouldn't think so either, but it totally works with 6 button in Picodrive