I have a Linkstation Live (HS-DHGL F/W 2.21) which I have frequently backed up to a USB hard disc attached to the Linkstation's USB port.
My firmware must be different to yours, since it looks nothing like your screenshot, so I am reluctant to offer advice but, since no one else is replying, I will try.
I suggest you try a different backup mode to "Normal". I used 'Overwrite backup (Append backup)'. There is a good post describing the meaning of the different backup types at this link:
(I have had to remove the link since otherwise the forum would not accept this post. However it was written by 'Paul' in answer to a thread about "LinkStation Pro Duo Backup / Rsync" in 2008, so I hope you can find it)
I also used to select "Create a file folder which would be identified by backup source", which I take it is equivalent to "Create target folder for backup" in your firmware. Also if you select "Create backup log file" a log file will be created in the folder that is being backed up.
Hope this is some help, or that you solved your problems by yourself without help.