Using "tmutil set destination -p" fails with a failure to save the password to the keychain
It seems that this was due to having a user password on the server (the "destination" password) that had special characters.

This was the original password:

cDWo3fVq%2XKg}T/r,2C)jV.bZcB3FxRU*sJ2UW2&amp;s+2[2X23b


Changing the password to a string of letters and numbers without symbols saw the username/password pair save successfully to the keychain.