I just use an enclosure that emulates a dvd-drive. Put a cheap SATA ssd in there and you can stop worrying about incompatibilities.
I've had this since about 2014.
I mainly had this issue with the default Windows install image names.
Fragmentation can be a bit annoying, especially when using exFAT, which doesn't appear to have defragmentation tools available. It can be avoided by never deleting files and instead reformatting every so often.
That being said, it's still a fantastic tool because all the images "just work" everywhere a class-compliant USB optical drive would.
Except it's not by all of the things I need to use, so that's not going to work. Compatibility vs. 4 GiB limit. There is no perfect, only trade-offs.