I know that it cannot be done if we go by any of the best practices indicated. Even with speaking with tech support, they suggest that it cannot be done and that it is not supported.
The reason it cannot be done is that when you do your backup onto the external USB drive and replug it say the very next week. It will not find the recovery points anymore. Since the recovery points are no longer found in the Manage Backup Destination, it cannot delete recovery points it can't see.
There is one solution that I am trying but not convinced that it works is that on all the backup jobs, uncheck the Monitor Disk Space Usage for Backup Storage and let the backkup job "police itself" with only the number of recovery points.
