I'm not quite sure what happened to it.
I always noticed on Lion it would use up space and grow even when I was still attached to my Time Capsule and Time Machine was able to do backups. Now with Mountain Lion (ML), I notice it is staying at zero space used (see my cap).
I have not been away from home (away from backup destination) yet to see if that makes it kick back in and start using space.
In Lion those backups were stored at /MobileBackups and I notice that is gone in ML.