I might have misunderstood what you are saying, but I have already tried pointing timeshift to a USB stick a couple of days ago. Like you what I found was the freespace in the usb stick behaved normally as expected, and the timeshift files in the stick looked perfectly normal also. However, the space loss issue remains, at the internal hdd.
I think what happens, is as long as you have an internal hdd, the system would still use the hdd as workspace, irrespective where the timeshift directory is, and it is the release of the invisible workspace after use, not the timeshift files, that is buggy, and is causing the hdd space loss.
Cheers!