A Seagate 8Tb External USB plugged in my Time Capsule does not show up - and the TC drive goes offline

Both the Time Capsule and the 8TB USB drive work perfectly,

Just to be clear I assume this means the USB drive works perfectly when plugged directly into your computer?

And the TC works fine as a router and with the 2TB external drive. How big is it's internal drive?

What model and how old is it?

A Mac can read several formats.. a Time Capsule can read effectively one. Mac OS Extended Journaled

https://support.apple.com/en-au/guide/disk-utility/dsku19ed921c/mac

Are you sure the drive is Mac OS extended journaled? That would be the first normal issue we see for drives not appearing.

A time capsule should have no issue with 8TB drive.. but a lot of seagate external USB drives above 4TB use a specially made disk called SMR, it effectively writes tracks over each other.. it is going out of popularity because it causes so many issues.. but Seagate made an awful lot of them that the cheaper external backup drives do use.

https://en.wikipedia.org/wiki/Shingled_magnetic_recording

Avoid like the plague and a plague on the house of seagate for this rubbish.

The last one is grasping at straws a bit.. but depending on your Time Capsule model, the USB 2 port of the TC does have issues with some USB 3 drives.. a USB hub can sometimes help. It is very hard to pinpoint as manufacturers constantly change USB chip suppliers to the cheapest within a single model number drive series. So you end up having some work and some don't. Fine with a computer which has much larger tables of USB chip drivers.. but the poor firmware in the TC is dated and lacking and plain old.

The 8TB is externally powered and I can feel a 'tingle' between the two devices.

This is what happens when devices are not grounded properly. Neither the TC nor the external drive are grounded.. and their respective power supplies can build up static charges. When you plug them together you are getting that static charge.. which can be very large btw.. in fact damaging to electronics large. For lots of items this is no major concern.. but it does not sound good.. I highly recommend returning the Seagate. Or using it differently. Especially if it is SMR type.

This should work !

As a general comment the TC is NOT a NAS and makes no pretension to be be one. It is extremely slow copying files to external USB.. it has no way to back itself up and unless you use a 3rd party backup there is no way Time Machine can backup files on a TC. I do understand the issue with small SSD.. but the TC is at best a poor man's solution which could one day land you in very hot water.

USB External Physical Volume • Mac OS Extended (Case-sensitive, Journaled)

For what its worth, when I tried to format an old spare (1 TB) drive and then use it with a Time Capsule at the USB port, I could not "see" the drive, nor would it appear when I opened AirPort Utility and checked the Disks tab.

The drive did reappear at the Time Capsule when I formatted the spare drive as Mac OS Extended (Journaled).

I've also run into issues where a drive will not appear, even when it is formatted in Mac OS Extended (Journaled) and also has its own power supply. Adding a powered USB hub can sometimes help, since the USB port on the Time Capsule is not a high powered port. In fact, it is an ancient USB 2.0 design which Apple never updated, so there may be some firmware issues affecting things as well.

I'll keep hoping for a NAS one day. Know any cheap ones ?

Not any good cheap ones. It takes more money to buy a Synology NAS, but it's worth it in my opinion.

As I said, the firmware for USB 2.0 port on the Time Capsule is ancient. It's the same firmware that was used in Time Capsules 10 years ago. Apple never updated the USB firmware.

I have a new USB 3.0 drive that is not recognized by the Time Capsule USB port. An older 8+ year old USB 2.0 spare drive is recognized. That might tell us something.

Might be a good idea to also be suspicious of the claims that USB 3.0 is backwards compatible with USB 2.0.

Is there a chance of an adapter of some sort ? I have hopes of using an old router to convert the USB to Ethernet, but - I know I have one, but I can't find it !

You can replace the hard disk inside the TC. I have updated them to 8TB. Plenty of info on the ifixit site.

Since your TC is the Tower model however I would not undertake this lightly as the internal wiring of TC has multiple cables passing over the hard drive.. and a fragile ribbon connector. You are more likely to damage something if you have no experience..

There is a possibility of using a Gen4 TC .. these are much better made.. wiring is solid.. and much easier to replace the disk. Still need to follow the instructions. For example the fan header is easy to damage. Lifespan is a question.. they are now 6years old min. With a bit of DIY love you can get a lot of extra life out of them.

The wireless is of course N so you turn that off.. and just bridge them and plug into the Gen5 TC.. I can buy them here for around $50 for the 2TB model. Speed of the internal hard drive is just as good as the Gen5 maybe better.

It is still not a NAS. And you need to be super careful with backups using another drive.

On using routers as NAS.

Until very recently USB hard drive speeds on routers was woeful.. and in formats your Mac will have issues with. i.e. not HFS+. You really should store files on a correctly formatted disk or a NAS that is capable of fully handling Apple's metadata.

Most routers do not support Time Machine even if you can store Mac files.. because they will not store metadata of the system files.

If you want to go this route then Synology or high end Asus routers are best in my testing. Speed is NOT up to a true NAS but reasonable to a fast USB drive.

Linksys WRT1200AC or later like WRT1900ACS have the very best USB/ESATA speeds and can even use HFS+ format.. they cannot do Time Machine which is odd. This router uses the same chip family as the older TC and many small NAS which is well optimised for hard disk data speeds. I would not buy it new but if you can find one second hand cheap it could be worth a try. I was very happy with its speeds to HFS+ disk.

Cheap NAS

For the DIYer there are plenty of Roll your Own alternatives. For the time rich; cash poor; with technical abilities this is a good way to go. It can take a long time to get near to commercial mature software like the Synology. But you will have a system you understand front to back and sideways down. Even a desktop Mac like 2012 Mac mini is still excellent little machine if you can pick it up cheap enough. This one is far superior to later ones right up to this year. USB 3 on these whereas earlier ones are USB2.

Is there ANY chance that the software could be updated ?

Not unless Apple releases new firmware for the Time Capsule that is focused on USB. I see no incentive for them to do so, since the hardware is 10+ year old and that cannot be changed.

I can't say whether a USB to Ethernet adapter might work or not, but worth a try.

my external drive does not show up on the Airport Utility app either by the way.

Then, you know that the 8 TB will not ever show up.....until it does appear in AirPort Utility with the Time Capsule drive......(named "Data" unless you have changed the name of the drive).

If you are also saying that "Data" does not show up in AirPort Utility, then that would be the first thing to work on......before you worry about the USB drive connected to the Time Capsule.