Time machine backup fails. "There isn't enough space on" when there is loads of space.

So, my setup is a 2012 Mini server on Mojave 10.14.6, 16GB RAM, 1TB SSD system drive and 1TB spinner internal. I have a 2TB Time Capsule on the other side of a gigabit switch and a 2TB USB 3 drive connected directly. Both are actively backing up just the 1TB SSD system drive. Time machine reports that "Estimated size of full backup: 869.01GB" in the options window and all other connected drives are in the excluded items list. This setup has worked fine for years.

About 6 months ago I started to get the "Backup Failed There isn't enough space on..." error on both drives. Both had plenty of space to backup a 1TB drive and could easily start deleting older backups to make do. I made a third backup, wiped both backup drives and started again. Now for the first three months the USB drive was fine whereas the Time Capsule started with the error straight away. Now both are insisting they cannot complete a backup despite having 1TB each of free space. The error pops up after each backup attempt.

If I open Time Machine prefs there are red "i" warnings next to each backup drive and both say "The backup disk needs 4.43 TB for the backup but only 1.02 TB are available. Select a larger backup disk or make the backup smaller by excluding files." Again in the options window the estimated size of a full backup is on 869.04GB

I've hunted around for answers to this and tried some things but is there a definitive fix for this? Why is it so inconsistent? I'd rather stick with mojave as I have an older license for some software I still need but would Catalina fix this anyway? Any ideas would be greatly appreciated.