However, yes, you can: https://support.apple.com/en-us/HT201517
I'm asking because of the following:
Let's say your laptop is 1TB, but everything except photos and for example dropbox is under 512gb.
If you then need to restore, your new laptop has to be able to contain the full restore (1TB, or whatever is used). This also means you can't just run to the store an get a standard model (instead of built-to-order) and restore, unless you buy something that has enough storage.
Having multiple apfs volumes helps here, and I'd love to have all cloud storage off of my main one.
When I owned a Mac mini it moved all the time: I took it on the bus with me to and from my girlfriend's house 100s of times.
(Although it died faster than it would have if I had left it in one place, it did last almost 9 years.)
Here is one random $115 option for a thunderbolt external NVMe enclosure with seemingly good reviews: https://www.amazon.com/dp/B0BB74BQVN
Realistically, you probably don't even need a thunderbolt enclosure to have a good experience with an external Apple Photos library, but this option is still way cheaper than the prices Apple charges.
At this point I don't need it, and I prefer USB, because I don't like the idea of hot swapping something directly on the PCI bus
