macOS Recovery does work as advertised. It simply never advertised the features you are looking for. I don't know whether or not Time Machine can, should, or has ever, allowed a restore to an external disk. I've never tried it.
I do know that APFS adds all kinds of complexities. When Mojave came out, Apple cut off my old 2011 test machine so I had to buy a new one and make my old production machine my new test machine. I have some funky, not-quite-suppored practices of my own. When I tried one of those when installing High Sierra, it didn't work. The installer refused to install onto the disk as I had configured it. But it only complained on the new machine. My old hack worked fine on the old machine. That was certainly annoying, but not a big deal.
It sounds like what you are attempting is something very similar to what I was trying to do. The system might not let you install the OS onto an APFS system. I could do it on my 2014 machine, but not my new 2017. Is there a technical reason for this? I don't know.
I'm definitely the type of developer you are talking about. I think I have 16 boot volumes of various versions, not counting virtual machines. I would never use Time Machine for those. Time Machine is only for my production system and only if it gets stolen or dies somehow. I would never, ever share a "Library" folder with another machine. I learned that lesson the hard way and don't intent to repeat it.
What exactly are you trying to accomplish with Time Machine? Are you doing development or testing? I generally don't do that kind of funky stuff with APFS volumes because they are so new. I have made low-level "backup" and "restore" operations via Disk Utility on older OS versions. I have also make big disk images of older OS versions. Sometimes those work and sometimes they don't. In particular, I recently tried to restore a couple of those older OS versions onto my own Samsung 850 and they didn't work at all. Those old OS versions don't have the firmware for that drive. Such is life. I have other SSDs and some older HDDs to use instead.
Instead, I normally setup test machines fresh and reinstall the software I need. Since I'm just testing, I don't need much 3rd party software. If I need to blow it all away and start from scratch, it isn't too much work, especially with fast SSDs. With APFS, I have used snapshots to easily restore to an old version. I also use VMs that have their own snapshots. But Time Machine is not appropriate for this kind of work. It is a consumer tool, not a development and testing tool.