Is it necessary to keep the auto-generated folders called, "Final Cut Backups"?

It's always a good idea to have backups and I commend you for manually making copies on another drive, but the best backups are the ones that happen automatically so you don't have a chance to forget to do it. I would recommend letting FCP continue to do automatic backups in addition to your periodic manual backups. The automatic backups are very small since they contain no media, only the library database. When the Final Cut Backups folder gets larger than you want, you can always go in and delete old backups.

Not at all, In fact most likely less, as the incremental backups don’t contain any media, just the database, while the library might hold the media and cache files.

Could you explain how you are backing up the libraries? Can't tell otherwise if it's worthwhile keeping the auto generated backups. You don't need to keep a huge number of the backups. It's a good idea to dump some after a while as they do build it. You can switch off backups if you want in the library inspector.