Archive is easy to do.. plug the USB drive into the Time Capsule USB port. (If not hfs+ format plug it into your computer first and format it Mac OS extended journaled.)
Open Airport utility and go to disk tab.. select archive disk under the Partitions box.
Once you start archive it does not need any more interaction. The TC will not accept backups while archiving but you should have already turned off Time Machine. It can still work as a router in the network.
The job takes from 24-36 hours depending on all sorts of factors.. but expect a full day. You will see a progress bar as it is working.
Once it completes the archive you do at least have a backup.
The way forward from that point is to upgrade the computer back to Catalina.
Then i erased the disk because it was really slow and i wanted to clean up everytinhig.
Here is the rub. Catalina performs poorly on mechanical hard disks particularly slower 2.5" laptop style.
Is your 2012 laptop running an SSD?
I am guessing you have a 1TB or larger drive in the Macbook.. otherwise you could not fit in 500GB worth of photos and videos.
What I suggest if you have 2012 laptop with mechanical disk is take it to the shop and get it upgraded to 1TB SSD. Supply them with the backup of the TC on USB drive and get them to recover from the backup to a date before you erased the drive. You will need to clearly state the date. Make sure they hand you the original drive.
IMHO the performance of Catalina on a machine of that age even with SSD will not make you happy. So if you already have an SSD in it, then I would suggest creating for yourself the system drive before this mess started. It is easy to do. However you will need external 3.5" fast mechanical drive or SSD. Boot the hard disk to recovery and use the Time Machine System to go back to before you started messing around.. and do a full recovery not to the boot drive.. (you need to back this up carefully before you start) but to the external drive. This will take several hours. Once you have this recovery it should be selectable to boot the laptop and you can then archive properly all your personal folders.
I can point to other posts with lots more details if all that sounds too much..
None of your data is going to be harmed doing any of this.. you have already archived the backup. Since the size is very large I would be 90% certain you are going to recover ok. All you need is the right setup.
You certainly can upgrade the laptop back to Catalina and then try again to open the backup even from Finder. That might be easier for you to do.. although I prefer the recovery method since that takes you back to original working boot drive before the mess started.