From what I can tell, Disk Utility will not re-format some USB drives so that you can set the partition table to MBR. Offhand I don't know what the issue is but it's pretty explicit about it when you click Partition.
I had to try another USB drive and that one allowed me to switch from Guid Partition Map to MBR when using the Erase command.
Just wanted to post this so if you're failing to get the right option, you don't keep scratching your head - try another USB drive. I'm on Sierra so I have the latest DU. I don't know if possibly a third-party disk tool could get around this those "locked down" USB drives.
