The src MAC it uses for load balancing in this scenario will be the Source MAC of the host sending the traffic.
As you are going across a Layer 2 link, the Source MAC will not change as it goes over the connection between the switches, it will stay the same.
The source will be that, the source of the frame which by default will be the sending host.
If Host A is plugged into S1 and it tries to send traffic to Host B which is plugged into S2, assuming the hosts are within the same broadcast domain, the Source MAC when it goes across the Port Channel will be Host A's MAC.
Balancing can only happen on output - a switch can only control where to send a frame, obviously it cannot decide what interface a frame is received on (that can only be done by the switch transmitting the frame, at the other end of the link).
So, the switch looks at the frames it has to send, for information relevant to its configured load-balancing method (source / destination MAC / IP etc) - in order for the balancing to happen on both directions, switches on both ends of the port-channel need to be properly configured.
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