External drives · Choosing a drive
Can I use my Time Machine backup drive as the fast drive?
Short answer: Not the backup volume — Storage Studio hides Time Machine volumes from its drive list. Keep them separate: the fast drive holds the only copy of what you moved, so its backup should be on a different physical drive.
Not the backup volume itself. Storage Studio hides Time Machine backup volumes and snapshots from the drive list on purpose — they're managed by macOS and aren't a safe place to run apps from.
It's also better practice to keep them apart: your fast drive holds the only copy of the things you moved there, so it should itself be backed up, and the backup shouldn't live on the same physical drive. If that drive fails, both would be lost together.
If you only have one large drive, you can create a separate APFS volume on it in Disk Utility for Storage Studio — but a second drive for backups is the safer arrangement.