Thanks to FM Support this has been resolved.
The issue was the folder structure for the RC Data contained invalid characters for the backup routine, such as commas. Although these characters are valid for the OS they're not for the backup.
I updated the container field using the filter command to remove non alphanumeric charcters and that triggered FM to transfer the data. After that the backups worked as expected.
The strange behaviour of FMS when a backup fails is still a mystery. The first time the FM file would be backed up but subsequent attempts would fail, unless I changed the backup to another folder, and then again the first one would work only. The fact the Schedule status says 'OK' even when the backup failed is wierd.