External HD format ?

Depends on how you want to use it.

Heavy video editing -- Mac OS Extended (Journaled).

Normal usage (writing, reading files without much editing of the files on the drive) -- APFS or Mac OS Extended (Journaled).

Need to read/write on Windows, also -- ExFAT.

APFS

Types of disks you can use with Time Machine on Mac - Apple Support

However, Time Machine can set up the disk for you.

Format the whole drive as HFS / GUID.

Notation - once it is setup via Time Machine Backup - it probably will convert to APFS / GUID which is the preferred format in Monterey.

He is talking about Time Machine. ExFat is right out.

He is talking about Time Machine. ExFat is right out.

Try re-reading the question.

If OP wanted to use it for Time Machine on Monterey, Mac OS Extended would be useless, also.

Man, this is the second time lately that I have had reading comprehension issues!