And I'm still waiting for a response to my query about TM's default formatting of a backup drive.
The best answer to your question can probably be found in
this Apple Knowledge Base article. Basically it says either Mac OS Extended (Journaled) or Mac OS Extended (Case-Sensitive, Journaled) may be used but the most common format is Mac OS Extended (Journaled).
The experience of users has indicated there are often problems with third party applications when Case-Sensitive is activated because the developers are often not careful with the case in file names resulting in otherwise inexplicable failures.
