The FBSP is created so that your new sccm clients are alble to send status message to that server in case it has issue installing, communication, updating with the SCCM site .
Sms 2003 clients dont send status message to the FBSP. They are not able to do that. When in mixed mode it allows the client to send error message when it has issue with th certificate based configuration.
Install on different server than the MP. Hope this helps understand.