It’s not a bug, but the setting description is wrong. All it does is prevent Discourse from deleting old backups from S3 when there are more backups than maximum_backups.
Backups do not work that way anymore. Depending on the value of the backup_location site setting, backups are either stored locally or on S3. When you delete a backup in the UI, it will delete that backup from local storage or S3 depending on that setting.