Moving on from the Time Capsule by Ivan Drucker It looks like you may do better putting the Time Capsule in bridge mode? There’s more to read than what I am quoting and the author would prefer you were using an Airport Extreme rather than a Time Capsule. Here’s an article that speaks to what you are trying to do. I tried formatting the 8TB drive as Mac OS Extended (Journaled) and with it again connected to the Time Capsule, I am able to see the drive from Time Machine and to back up to it, but backup is extremely slow - three days already and so far has only backed up 50%. Is this a limitation in Monterey? Or is it a limitation of my Time Capsule (version 7.8.1)? If I connect the APFS formatted 8TB drive to my MBP via the hub, I am then able to see it from Time Machine, but I’d prefer to have it connected through Time Capsule so it can be available to other Macs via WiFi (and so that it doesn’t take up a USB port on my hub!) Neither do I see the 8TB drive in AirPort Utility under “Disks” connected to Time Capsule. In the Finder sidebar under Locations I see Time Capsule listed, but the 8TB drive does not appear under Time Capsule. In Time Machine I cannot see the 8TB drive to select it as a backup disk.

The Time Capsule is connected via ethernet cable (through a hub) to my MacBook Pro (M1 Max) running Monterey 12.5. The Time Capsule is not being used as a router, just for Time Machine backups.

I have an 8TB APFS formatted drive connected via USB to a 2TB Time Capsule.

Time machine format disk