how does replacing Time Machine disk work?

jdargie wrote:

I replaced my existing Time Machine destination drive with a new drive. Then I unplugged my old Time Machine drive. Backups are now being saved to the new drive just as I wanted.

My question is, can I reformat my old Time Machine drive or will I need it if I want to restore my computer from Time Machine (if I do need to restore my computer it will only be from a point in time after switching to my new drive).

If you have to revert to your previous macOS it would be on the old TM drive. If you are past that point you can repurpose the drive.

How to erase your Intel-based Mac - https://support.apple.com/en-us/HT208496

How to reinstall macOS from macOS Recovery - https://support.apple.com/en-us/HT204904

Revert your Mac to a previous macOS version
https://support.apple.com/en-lamr/guide/mac-help/mh15216/10.15/mac/10.15

If you won't need an old backup, you can erase it.