Create a case sensitive sparse bundle on the destination folder with:
hdiutil create -size 500g -type SPARSEBUNDLE -fs "HFS+J" -fsargs -s -volname 'TimeMachine' TimeMachine.sparsebundle
Tell TM to inherit it (sets the correct label):
sudo tmutil inheritbackup /path/to/TimeMachine.sparsebundle
Mount the sparsebundle.
Add as destination for backups:
sudo tmutil setdestination /Volumes/TimeMachine
(Partial reference )