iCloud Drive only automatically syncs the Desktop and Documents folders. To my knowledge, there is no way to do a Time Machine backup to iCloud. That might be a possibility in the future, but as it is right now, iCloud not a competing solution.
There is no supported way. However, it would likely be flakey and probably doesn't make any sense financially.
I suspect you can attempt to place a DMG image on icloud drive and mount that locally. Then have TM dump data into that. ( unmount and/or switch TM target to something else). The major problems are that
1. Double translation of the virtual disk is likely slow and the DMG has good chance of getting corrupted.
" ... Writable sparse disk images are particularly sensitive to connectivity loss between the disk image volume and the disk image file. Reports of disk image corruption have grown steadily worse, especially since the introduction of APFS, and especially when the disk image is hosted on NAS storage. ..."
bombich.com
2. Apple rule of thumb is that throw twice as much TM space as have stored on a Mac. iCloud pricing is $9.99/mo for just 2TB ( 1TB of coverage by TM if use that rule of thumb. ) '
It is flakier and more expensive. Not much upside there. Even in supported contexts, TM has long term integrity issues.
A complete image backup Apple isn't going to do to iCloud. There is way to much static , non-unique user data in the more complete system image. In some cases would be copying about as much in Apple files (that belong to them) as they would user files. That doesn't make much sense in terms of efficiency. Duplicative storage on storage drives the user buys isn't Apple's problem (that's the user's money). It isn't a question of Apple adding the 'features' to do it. It is likely whether they even want that data at all.
Pictures/Video aren't covered by the "iCloud Drive" folder , but most certainly are covered if you have Photos Libraries turned on for backup to iCloud. Lots of other iCloud enable apps can backing store to iCloud also. It isn't just the 'documents' folder if flip on all the "iCloud" switches inside of Settings app .
If had a rotating TM backup target that was a local Disk Image. Backed up to that image followed by rotating back to the 'primary' image. That static TM backup image disk likely could be loaded to iCloud drive. But if it is all about zero interaction, "set and forget" TM backups then, no.