Time Capsule using Time Machine as backup over a Deco 6E mesh wifi network? how do I configure

Do I lose the backups that are on the Time Capsule?

No.

How does the network know which wifi to use?

Connect your Mac to the Wi-Fi network that you want to use to back up the Mac to the Time Capsule. The mesh network should provide much better coverage throughout your house.

There are any number of free utilities that will reveal a "hidden" network in seconds, so If you don't plan to use the WiFi on the Time Capsule, it might make more sense to simply turn off the Wi-Fi function on the Time Capsule.

You will still be able to back up to the Time Capsule over the mesh network if you do this.

There are any number of free utilities that will reveal a "hidden" network in seconds, so If you don't plan to use the Wi-Fi on the Time Capsule, it might make more sense to simply turn off the Wi-Fi function on the Time Capsule, so it won't broadcast a Wi-Fi signal at all.

You will still be able to back up to the Time Capsule over the mesh network if you turn off the Wi-Fi signal on the Time Capsule.

Connect an Ethernet cable from an Ethernet port on the "main" mesh router to the "O" port on the Time Capsule.

Perform a Hard Reset on the Time Capsule by powering it up for a minute, and then holding the reset button in for 7-8 seconds. Release the reset button and allow a full minute for the Time Capsule to restart to a slow blinking amber light status

Open AirPort Utility on your Mac (Finder > Applications > Utilities > AirPort Utility)

Click on the Other WiFi Devices button

Click on Time Capsule

A window will open with the correct setup for the Time Capsule.

Set up the Time Capsule again to provide a network (which you will not use, since you will be using the mesh Wi-Fi network).

This sounds like you were connected to the Time Capsule Wi-Fi network, but the connection was lost.....as would be expected.....when you turned off the Wi-Fi on the Time Capsule.

Make sure that your Mac is connected to the mesh network Wi-Fi signal by clicking on the Wi-Fi "bars" at the top of the Mac's screen and then selecting the name of the mesh network.

You may need to restart your Mac and the Time Capsule. To restart the Time Capsule, power it off by pulling the power cord from the back of the unit, wait a few seconds, then plug the power cord back in and give the Time Capsule a minute to restart. Should be a green light on the Time Capsule at this time.

I am not able to duplicate the issue that you are reporting if I turn off the Wi-Fi on my Time Capsule and use the Wi-Fi from another router.

At this point, all that you can do is start over again and set up the Time Capsule again from scratch. Ignore the Time Capsule Wi-Fi network and connect your Mac to the mesh network Wi-Fi.

Nice work.