Can’t complete first Time Machine back up its filling up the humongous external disk

My wife has a fairly new M1 MacBook Air and have been trying to complete for weeks the first Time Machine back up. I’ve been using Time Machine for years and I’m very familiar with how its supposed to work.

It has about 275 GB on the internal disk running Big Sur 11.6.4 (I’d like to upgrade to Monterey but I need a good back up first!)

I have TWO (2) 2000 GB (2TB) external USB-C disks formatted APFS as Apple requires. Each is about 7 times the capacity of the data I want to back up. Each external disk was erased and formatted using Apple Disk Utility and they do show up with the TM icon so the MacBook knows they are TM disks.

I have two different USB-C cables and I always plug directly into the MacBook (no hub)

I have booted the MacBook into Recovery Mode and run Disk Repair on the internal HD and found no issues.

I’ve run Disk Repair on both external USB disks and found no issues

Every time I try to run Time Machine for the first back up it runs all night and declares it can’t finish the disk is full. When I look at the 2000 GB external disk there is 100MB open (yep, that’s full) and get the source is only 275 GB. The 2000 GB TM external disk should not be full on the first initial back up.

I’ve tried this with two different USB-C external disks and two different USB-C cables. I’ve erased and re-formatted time and time again using Apple Disk Utility.

Once and only once I decided to exclude the PICTURES folder in the Home folder and it completed a back up. But then next time it filled up the disk again with PICTURES still excluded, I had made no changes.

I’ve tried so many things I’ve lost count. Nothing seems to stick.

Can anybody offer anything else to try?