Otherwise though, now that that TC is formatted vis APFS, the time machine backups ARE working.
The Time Capsule disk.....named "Data", unless you have changed the name of the drive.......is formatted in Mac OS Extended (Journaled). You cannot change this.
If you have "updated" to Big Sur and erased the Time Capsule hard drive, then the format of "Data" remains the same in Mac OS Extended (Journaled). But, the disk image......called a "backupbundle" that contains all the backups of the Mac running Big Sur is formatted in APFS.
So, the format of the Time Capsule disk remains the same, but the backup file is formatted in APFS on the Mac OS Extended (Journaled) drive. Gosh, I wonder what could possibly go wrong with this type of goofy setup.
When you run the backup of your Mohave Mac, the file that stores all the backups might be called a "sparsebundle" file. That disk image will be formatted in Mac OS Extended (Journaled) because Mohave cannot back up to an APFS disk image.
So, the Time Capsule hard drive can store backups of Macs that are running Big Sur and other operating systems as well.
The Mohave Mac will not be able to access the backups made by your Big Sur Mac using Time Machine. But, you could use Migration Assistant on the Big Sur Mac to move data from a backup of the Mojave Mac over to the Big Sur Mac. Complicated? Yes.