iCloud: "Not enough disk space to copy [folder]" with 2TB of space on iCloud drive

I just purchased 2TB of iCloud storage because I need to back up my internal hard drive to Time Machine to reinstall a previous macOS, which is going to require wiping one of my larger EHDs and using it for the backup. My intention was to temporarily transfer all of the files on my external to iCloud while I do this, as opposed to going out and buying another EHD just for this. After purchasing the 2TB of iCloud storage, I'm being told that there is not enough room on iCloud to move ANY of the folders from my current EHD, despite being told there is 2.04 TB both in the status bar and under Apple ID > iCloud Storage.

Edit: just to clarify, I have confirmed that none of the files being backed up from my iPhone into iCloud are occupying anywhere near the amount of space required for my external hard drive backup.