TM backups working with external startup drive?

I bought new mini with idea to have system in internal and homers in external drive.

Seems to be that fixing home folder permissions, homers have to be in startup drive.

Since there's not enough space in internal to fit both system and homedirs, I'll have to use the external as startup drive.

And I'd like to keep using Time Machine for backups.

This tells that maybe I can't make a full restore to external disk, if it's APFS:

https://discussions.apple.com/thread/8417393

Anybody know does TM backups work even with single files, if you need to restore them to external?

And does TM make full backups of external APFS startup drive in Mojave?

Should I rather format that startup drive as HFS+?