I just confirmed that networked TimeMachine backups use APFS in the same way as they would work on a local APFS disk.
APFS TimeMachine protocol has been completely reworked to use snapshots instead of hard links - faster and much more reliable.
TimeCapsule also works with this, since networked backups are encapsulated in sparse volumes on the underlying file system.
You do need to create a fresh backup after upgrading to Big Sur.
This does not change the implicit limitations of network speed and Apple's SLOW SMB protocol. But the nice part with networked TimeMachine is that it just worked in the background even during machine "nap" time.
APFS TimeMachine protocol has been completely reworked to use snapshots instead of hard links - faster and much more reliable.
TimeCapsule also works with this, since networked backups are encapsulated in sparse volumes on the underlying file system.
You do need to create a fresh backup after upgrading to Big Sur.
This does not change the implicit limitations of network speed and Apple's SLOW SMB protocol. But the nice part with networked TimeMachine is that it just worked in the background even during machine "nap" time.