Totally get your frustration, I’ve had similar issues after recent Plesk updates, what helped me was disabling auto updates and testing new releases on a staging server first before rolling them out live.
If a user takes a backup from their Plesk panel, it uses their account’s allocated disk space, while a full server backup consumes the server’s main disk space, so yes, your understanding is correct.
This error usually happens because of FTP passive mode or firewall settings. Try enabling passive mode (or opening the passive port range) and make sure the cron/auto-backup job has the same FTP access permissions as when you run it manually.