Tested on Synology Rack Station RS2414rp+ with firmware DSM 5.1-5022 Update 4 confirmed on DSM 6.0.2-8451 Update 1.

A Synology NAS:

• Does not support the use of CHAP on dynamic discovery.
• It does support the use of CHAP on statically configured targets.
• Only supports CHAP passwords between 12 and 16 characters long.
  • Shorter are not accepted and longer passwords are truncated to 16 charachters.

Sources:

• Synology Community Forum - DSM 4.2, XenServer 6.2, iSCSI
• Personal experience.