I just ran into this same problem using a Sandisk USB drive that I had previously used as a boot disk for ESXI . After many formating and manual install attempts I finally got the drive to work by completely removing the existing partition from the drive using Windows diskpart command. I then reformatted the drive to FAT32 and a manual install was succcessful. I found a guide on Diskpart here:
https://community.spiceworks.com/t/how-to-delete-partition-on-usb-thumb-drive/78322/3
Bruce