Using iCloud backup for photos when photos system folder is on a separate drive

I back up photos to iCloud.

To try and save 40 GB of hard drive space I have just transferred Photos to a separate drive (2Tb Seagate solid state seagate drive formatted for this purpose). I have designated this file as the System folder.

Before I delete all my photos on the main computer - how should I configure iCloud so iCloud backups still occur?

I find Icloud a little confusing to think about. I presume these backups occur only when that drive is plugged in or is it when I am using my iPhone and the internet is available or my Data is turned on?

Rick