To add to Toni's explanation: The Apple support document does not say anywhere, that iCloud Photos is a backup. It says we need to make a local backup and "If you ever lose the files in your Photos library, you can restore them from the Time Machine backup. " That is tongue-in-cheek, as the "files in the Photos Library" are not necessarily all our or photos, only the database files and the currently downloaded photos from iCloud, if we are using iCloud Photos. We can recover the albums and the metadata tags, like titles, but not all photos. The Time Machine backup of an optimised library will only include the photos, that currently are not optimised. When you restore the library from Time Machine and the optimised versions are still in iCloud, Photos can download the originals from iCloud and the restored library will work again like before.
Recovering the albums will work with Photos 5 and 6, as long as the photos are still in iCloud Photos. On older systems versions we cannot even recover the albums completely, because Photos would remove all traces of optimised version from the library, when we open a restored copy of an optimised library, before we even had a chance to enable iCloud Photos for this library and fill the gaps left by the optimised versions in the albums.
As anything we do while working with Photos for Mac or Photos iOS will immediately sync to iCloud, we cannot rely on iCloud Photos as a backup, where we can recover accidentally deleted photos. iCloud Photos is always the same as the mirrored versions of the library on our synced devices.
What a Time Machine backup of an optimised library cannot give you, because the Time Machine version does not hold all original image files:
- If you are having a problem with iCloud and need to reset iCloud Photos by deleting all photos from iCloud Photos, to remove a corrupted image or video, the Time machine backup does not suffice. You need a copy of the full version of your library, without "optimise Storage".
- If there is a problem with your network ad you cannot connect to iCloud for several days and need access to your photos, the Time Machine backup cannot Gove you access to all your photos.
- You cannot keep an archive of older, full versions of your library, so you can recover older photos, that you have deleted a long time ago, and that are no longer in Recently Deleted.