Sharing a Time Machine destination for encrypted backups

Hi,

I want to use a (large) external drive connected to my Mac Mini as a Time Machine disk for both that machine, and two machines on the local network. I would like to create encrypted backups from all 3 machines - even if they have the same password.

When I add the new disk in Time Machine preferences on the Mac Mini, and select to encrypt backups, it re-formats the disk in APFS (Case-sensitive, Encrypted). It backs-up fine, no issues there. I make the disk shared File Sharing preferences, choose to share as a time machine backup destination, and add the user of all 3 Macs with read-write. (Allow Guest user is also selected in Options.). No errors come up. But when I exit Sys Preferences and re-enter, the additional user I added for the disk is no longer visible. I can connect to the drive from the other Macs on the network, but attempt to add it as a Time Machine disk on the other 2 machines produces an error around not having sufficient permissions.

If I do it the other way - format the disk un-encrypted, share it as a TM destination, and add it as a destination (with encrypted backups) from one of the other Macs - it insists on re-formatting the drive when I attempt to add it a TM disk on the machine it's physically connected to.

I'm guessing that the way TM manages sparsebundles on a remote and locally mounted disk must be different. If so, can it be changed to treat the locally-mounted disk in the same way as a remote one?

This also makes me think that it's not possible to share or use Encrypted volumes (or APFS Encrypted volumes) as Time Machine destinations. But if that was the case I would have expected an error when setting-up sharing in Preference. Is this a bug, or have it set it up incorrectly?

Grateful for any direction - have lost hours trying to figure this out already.

A.