It strikes me as odd that APFS doesn't support hard links any more despite being the "new" filesystem, yet the entire macOS backup system relies on the old deprecated HFS+ filesystem for Time Machine disk format, since it uses hard links....
Seems a backwards, muddled, confused step (as does Catalina itself!).
The issue at question is hard links for directories, not just hard links. Hard links aren’t going anywhere, whereas hard links for directories was a dangerous feature to begin with (I won’t expand on that but you can easily find explanations) and basically only there for Time Machine.
APFS has native support for COW and snapshots which is way better than the directory hard links hack. They’re just slow to port Time Machine to APFS targets.
Seems a backwards, muddled, confused step (as does Catalina itself!).