I have since posted that "I am cutting the FAT" from the usbinstall script.
Thus the usbinstall script will only support ext file systems.
With no intent to influence the decisions made on usb install I just want to mention the following considerations:
1. Eliminating Zip emulation means most older machines will no longer able to boot from usb. Zip emulation has been the best bet since in old times PC BIOS supported booting from Zip. For some other PCs HDD emulation worked and no others. By eliminating these choces and using only Ext, means many such PCs will no longer able to boot. USB install in TC is excellent in design as it gives these choces to enhance chance of bootability.
2. Zip emulation in TC usb install beautifully partitions the usb drive in 16M partition, where it puts tc core and separates extensions in the second partition. EXT options creates a single partition where all is mixed together. If going forward only EXT option will be used, I suggest that usb install partitions the usb drive in similar way as Zip option was doing, separating TC core in a small partition from the rest. This enhances integrity of the system.
If the new usbinstall does not partition the usb to separate TC core and all is mixed in one partition, then I suggest to do it manually using Gpartes and create additional partitions on the usb stick, such as FAT32. For this usb stick needs to be in HD mode.
3. In a way TC usbinstall is superior to Unetbootin in that it supports usb flash drives configured as HD drives. Unetbootin does not understand this important configuration. Since the tremendous advantage of using usb flash sticks configured as usb HD drives is hard to beat, I hope after change planned for usbinstall this capability is continued, that means usbinstall will continue to recognize and accept usb flash configured as HD drives. If this capability is lost, then it will be harder to use for TC usb sticks larger than 1 or 2 GB.