Does Time Capsule automatically backup to the cloud?
AirPort Time Capsules do not come with any cloud-based storage. They are an entirely network-local backup and storage device. Whomever told you it it had storage "on the cloud" was not being truthful. You can see the full specs for the AirPort Time Capsule on Apple's web page. As you will see: there is no mention of any cloud-based storage at all on that page.