Backup data stored beside a local TimeMachine backup

That is correct, but 10.15 (Catalina) will only do Time Machine backups to HFS+ disks, not to APFS. APFS is not an option for 10.15 Time Machine backups.

Big Sur can backup to APFS disks, but the entire volume must be dedicated to Time Machine. There can be other APFS volumes on the same physical drive, however, which seems to be what you want. That said, you said upgrading to Big Sur was not an option for you due to software incompatibility.

With 10.15, I think the option that best fits your requirements is to configure multiple volumes of fixed size on the drive that contains your Time Machine backup. Time Machine will live within its own volume and delete backups from the past as needed to stay within that box. I would not trust that terminal command as a long term solution, and there have been posts in these Discussions from people whose files that were co-located on a Time Machine volume had disappeared. That physical drive would then also be a single point of failure now for multiple things (data and backup) so you need to reliably backup the data volumes on that drive to somewhere else. Personally, I never store original data on the same physical drive as my Time Machine backup, but you might not share that point of view.

Eventually, you should see what it takes to move on to Big Sur, which does provide you with more flexibility. Every year Apple introduces a new MacOS and eventually, someday, Catalina will cease to be supported.

With Big Sur one cannot use a Time Machine backup drive for other storage, the entire volume must be dedicated to Time Machine. With Catalina you can use the backup drive for other storage, but it is strongly recommended not to. Time Machine grows in its need for disk space -- your terminal command may limit that but what will it do when it reaches the limit you have specified? Is that behavior well understood?

One other problem with using the Time Machine disk for other storage is that the MacOS takes over the Time Machine backup drive and even modifies some of the permissions once Time Machine backups start. You may not notice that at first but at some point down the road, it may (will?) create conflicts. You can see this yourself by looking at the permissions for the volume that your Time Machine backup is stored on, compare it with a drive used only for regular storage.

If you proceed anyway with using the disk for both Time Machine and other storage, you may be able to backup the other storage using a clone program like Carbon Copy Cloner or SuperDuper and telling it to exclude the Time Machine folders from the files it backs up.

Your setup sounds complex and vulnerable and certainly not easy to reliably back up. I would rethink it. I'm not trying to be difficult but rather helpful. We use huge numbers of disks where I work and we plan for them to eventually fail by arranging robust plans to recover. Keep in mind all disks do fail eventually, do you have a robust backup scheme that will enable you to recover in a straightforward way? The use of RAID does help but entire devices do fail also.