I asked the question out in another thread on Reddit, and apparently another user also cannot get timeshift working.
removed link
As you can see from my comments, this is a re-cap of what I've tried...
-----
Are there instructions for creating a properly formatted drive? I've tried a USB Flash Drive, USB Hard Drive, MicroSD card, etc. I've tried NTFS, FAT32, and ExFAT file systems. I've switched between the USB2 and the USB3 ports. Recording live TV works in every scenario. Catch-Up TV works as well. Cannot pause live TV whatsoever. Using Vader's sub on an up-to-date Dreamlink T2 box.
-----
If I go-to a channel, press pause, nothing happens... The video just keeps playing. Rewind button does nothing as well. However, if I switch to my File Browser app and select my storage device, there is a freshly generated `_timeshift.ts` file right at the root. Upon opening the file in a media player app, I can see that it's the exact channel I was trying to timeshift starting at the moment I switched to that channel! So it appears my box is generating the timeshift file, but it's not doing anything with it.
-----
I did a factory reset, breezed thru initial setup screens again, downloaded DOL2, input Vaders portal info, and didn't change any other settings. Pressed pause. Still nothing! Timeshift file is still being generated on SD card.