Time Machine controls / adjustments

If you have data saved in iCloud it is extremely safe. While iCloud is NOT backup, Apple you can be sure keeps their drives backed up.

However, to answer your question unless you specifically told Time Machine to NOT backup your iCloud data yes Time Machine backs it up. Please refer to Does Time Machine backup iCloud Drive? - Apple Community where you can see where it is backed up.

Time Machine requires an external drive be attached to your Mac to run its backups.

It does not backup to the startup drive of the host Mac. Files and folders backed up will live on the external drive.

Back up your Mac with Time Machine - Apple Support

Also: Restore items backed up with Time Machine on Mac - Apple Support

Go to System Settings and then select the settings you prefer for Time Machine.

System Settings - General - Time Machine

Also, it is helpful to us if you tell us specifically what you are looking for so we can point you in that direction assuming it's available.

Simply plug in a Time Machine backup External Hard Disk, ensure it is formatted correctly and your iCloud data will be backed up on the initial backup. Your iCloud data will continue to backup the SAME way all other data is backed up that is stored on the internal 2TB SSD you have.

In short, you are over thinking this. Just let Time Machine do it's job and let iCloud do it's job and your data is secure and synced across the devices you selected to sync it with.

No disk, no options. Add it first.

It’s synced in real time, nothing to do with Time.