Need some help with Time Machine issues

Mac user since 2016, have always used TM with no issues. Using it to backup my main drive (1TB) and external drive (2TB)... Have always used the same physical backup drive as well. Current machine is 2021 model with latest OS.

I do manual backups and sometimes months go by without a backup and I just noticed my external is no longer being backed up (newest backup I can access is from July 23'). Since I've been using TM it's always purged the oldest backups to make space as needed so I'm not sure what's going on with it now... Current storage used on the external is 1.07TB and current storage used on the Mac is 521GB. I did check the settings and nothing is listed as being excluded.

Did a search on here and I see it's recommended for your backup drive to be twice the size of the drives you're backing up (so in my case 3TB total) but what I'm not understanding is why now after about 8yrs of using TM is not no longer working as it did?