Any ideas why my Airport Extreme identifies itself as a Time Capsule in Time Machine?
Apple only supports backup to Time Capsule, so the wording there is a constant and not something designed to know it's not backing up to Time Capsule as opposed to an actual server or directly connected drive.

You can test this (since I doubt they recently changed course on this with an update) by connecting a totally new drive to the Airport Extreme, wipe the drive from AirPort Utility and then try to set up Time Machine to back up to that newly erased drive.


Time Machine doesn't back up to AirPort Extreme AirPort Disks