Advisability of using a OneDrive folder mounted on external drive for Time Machine?
Theoretically it should work ok.

Note that you cannot specify a folder as the Time Machine backup destination. You'll need to create a sparse bundle by following these steps, from a MacRumors thread:

In Disk Utility, select File > New Image > Blank Image.

Enter your desired filename and set Where to your OneDrive folder on the external drive. You can choose the size here, too.

Ensure Format is set as OS X Extended (Journaled), and Image Format is "sparse bundle disk image".

Once it's created, unmount the bundle by clicking the Eject button next to it in the list on the left.


  In Finder, double click the sparse bundle image file to mount it, or use the mount command in Terminal.
  
  Now set Time Machine to use this sparse bundle:

sudo tmutil setdestination /Volumes/&lt;path-to-sparse-bundle&gt;

  
  When you start Time Machine, it will create a Backups directory within the sparse bundle for your backups.