I'm not sure I understand -- preserve 'its own content'? We will always preserve a folder named "Backups.backupdb", regardless of whether Time Machine is actively backing up on that drive, assuming you're using "Smart Update" and there's no folder on the source named "Backups.backupdb".
The "What's going to happen?" section of the UI will tell you what'll happen...
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--Dave Nanian
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