iCloud Drive just works. Time Machine just works. So Time Machine should back up the contents of your iCloud Drive? Maybe not.
Optimize Storage
When you keep documents in iCloud, are they backed up in Time Machine, searched in Spotlight, and kept securely?
Should Time Machine back up on demand, or every hour? Sierra doesn’t seem sure. And how Apple needs to think of users more in the App Store.
The Eclectic Light Company 