Huh? “To improve reliability, ... will remove your existing backup history” Doesn't that kind of miss the point of having backups??
Time Machine is set to use a network share dedicated to that purpose. It claims to have 7T free, which would be true only if the volume in the sparse bundle automatically expands (does it?). The bands files total 118G which sounds like the size I created the volume for initially. I think the initial full backup consumed about 25G.
Thinking the volume might have been corrupted, I restored it from a snapshot of the host storage's volume that was made just before Yosemite was installed.
What's going on? I can't imagine that Apple is serious about casually throwing away all backups.