Time Machine says there is not enough room on a new 5T drive format is APFS.

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I keep getting this message-"Time Machine says there is not enough room on a new 5T drive format is APFS."
Got same message with a 3T.
Both drives started clean.
What is the issue?
 
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Your Mac's Specs
2024 M4 14" MBP, iPhone 16 Pro Max, Watch S7 & Watch S9, AirPods Pro 1
Maybe try to format one as HFS+ (Mac OS Extended (Journaled))? Then Time Machine should format the drive as APFS when activated.
 

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