That was a concern to me before I migrated two laptops: one had FileVault enabled and the other not†. The conversion dealt with FileVault without a hitch. Even better, enabling FileVault on the non-encrypted one after the conversion let it encrypt without even the reboot previously required with HFS+, one less excuse not to enable it.
Backups to an external disk are still done to HFS+. External disks formatted as APFS either do not show up as available disks to backup to or prompt to format the disk back to HFS+ (I encountered both cases as I was trying to put TM into submission on that one). Remote backups (over AFP) are unaffected and still use (optionally encrypted) sparse bundles. So Time Machine itself appears to have not changed much in that regard. Local snapshots do leverage APFS snapshots though and are browsable at /Volumes/com.apple.TimeMachine.localsnapshots.
† A mistake on my part following a restore from Time Machine where I did not enable encryption.
Backups to an external disk are still done to HFS+. External disks formatted as APFS either do not show up as available disks to backup to or prompt to format the disk back to HFS+ (I encountered both cases as I was trying to put TM into submission on that one). Remote backups (over AFP) are unaffected and still use (optionally encrypted) sparse bundles. So Time Machine itself appears to have not changed much in that regard. Local snapshots do leverage APFS snapshots though and are browsable at /Volumes/com.apple.TimeMachine.localsnapshots.
† A mistake on my part following a restore from Time Machine where I did not enable encryption.