Doesn't Time Machine already cover this?

On Mac

Not if you use Optimize Mac Storage. Time Machine only copies files that are on your Mac's disk. With Optimize Mac Storage on, your Photos originals and offloaded iCloud Drive files live only in iCloud, so Time Machine never sees them.

Parachute Backup fetches those originals from iCloud and keeps a full copy on your own storage. Keep both: Time Machine restores your Mac, Parachute Backup protects your photos and files independently of iCloud. Give Parachute Backup its own drive or folder, not the Time Machine volume.