Deletion of earlier files will never go so far as to delete the current backup. You will lose the history.. not the current.
But I would seriously think about,
1. Replacement of the TC.. a Gen2 is living on borrowed time. They become unreliable after 3years.. you are stretching fate.. now.. already taut.. it will snap soon.
2. Use a USB drive plugged into the TC.
This will survive the TC failure.. and you can keep using it.. will work even better of course plugged directly into the computer you are backing up.
3. Archive the old TC to save the older backups from further deletion.. wipe the TC and start over with a clean backup.. no bad deal.. USB drive plugged in will take overnight to backup 500GB but should be ok. Still won't save it from d-day.
4. Sell off and buy a new TC.