Indeed, just a simple TM backup from the internal to an external. But I'm still not properly understanding. So if the destination drive get's overwritten due to space running out, are you saying that snapshots will backup the oldest data on the internal drive to preserve that overwritten data? Is there a limitation to the file size that snapshots can save?Assuming you are just copying from one disk to the DAS you overwrite the contents of that drive with those of the source drive. There is no backup history. Snapshots allow you to replace a file from an earlier time which was replaced by a later backup.
I'll add that I initially started with a 4TB NVMe+enclosure for TM but am waiting now on a new enclosure and in the interim using a 1TB HDD. This would explain (if my above understanding is correct), that the 500GB gets overwritten quickly and the old data ends up as snapshots on the internal so quickly.