Yes, but unlike previous operating systems, you will not be able to restore a Big Sur Mac completely using a Time Machine backup.
To restore the Big Sur Mac, you must first erase the Mac's hard drive and then reinstall the Big Sur operating system. Then, use Migration Assistant to bring over the data from a Time Machine backup to the "new" Mac.
The Time Capsule hard drive cannot be formatted in APFS, it will remain Mac OS Extended (Journaled). But....the actual sparsebundle file on the Time Capsule containing all the backups will be formatted in APFS (Case Sensitive). So, in order to back up the Big Sur Mac to a Time Capsule, there must be a format "switch" on the data making things a lot more complicated. Gosh, I wonder what could possibly go wrong.
My recommendation.......if you want to back up using Time Machine.......would be to connect a USB drive directly to a Big Sur Mac and back up that way. In this type of setup, the backup drive will be formatted the same way as the Mac, so a lot less to go wrong.
And.....chances are, your Time Capsule is 5+ years old. At 5-6 on average, they tend to start acting up. If the Time Capsule is 7+ years old, I would not store any data on the Time Capsule hard drive that I could not afford to lose, because the hard drive is really "suspect" at this point in time.