I have had three different time capsules and two of them have had drive failures. One is very old, and has had two drive failures, and the other one, the tall version, has had one drive failure. Each drive failure happened with no warning.
However, it is very unlikely that you will have a drive failure on your time capsule at the same time your drive on the Mac you are backing up will fail, so I would not worry too much.
Over the years, I have had to restore several iMac’s and MacBooks from Time Capsule. Every time I had to do that, the restore went perfectly.
Due to the information being stored on my main iMac, mainly our families photos, but other stuff too, I have two back up resources. Besides a Time Capsule, I have a small 2 TB WD “My Passport for Mac” plugged into my iMac. This is inexpensive, very small and powers from the USB port. “Just in case!”
Having two backups also is helpful if you need to use Time Machine to recover a file that you delete and later find you need, and your TC backup fails.
I had no problem with 6 TB drive, installed in August and still working great, but I have no idea if there is a size limit. Apple only sells 2 TB and 3 TB versions, but since 6 TB has worked, even larger drives may work, you just have to try and see. Be careful with the cables, they are very delicate.
I just installed a WD Red Pro 6TB in my 2013 TC. The old drive just went away, could not access it. After I removed it I tried to access it using a drive doc connected to my iMac with USB, and it could be seen, but when I tried to reformat with secure erase it had errors.
When I started the TC, the Air Port util said it was possibly overheating, and the fan came on full blast. I checked my cables, and re-seated the larger of the three cables. When I powered it up again I still had the error message, but the fan did not come on. I was able to format the disk, and I quit out of the Air Port util, and restarted the AP util, and everything was normal. I am now backing my iMac and MacBook Pro. Our household also has another iMac and Mac Book which I will back up tomorrow. I used the 6TB WD Red Pro only because I had one "on the shelf", but it is a very good disk that hopefully will last a long time. Been on 7 hours and running cool. At the prices, why fool with anything else?