USB device added to ESXi host cannot be formatted with VMFS (File System). This is by design that storage stack filters USB devices when mounted.
FAT32 is unsupported file system for pass-through USB devices.
You can use the /var/log/usb.log file to view the status of USBArb with the device attached.
lsusb command can be used to list all the devices attached along with the Bus and its Device ID.
For example, the sample output looks similar to:
Bus 001 Device 002: ID 8087:800a Intel Corp
Bus 004 Device 001: ID 1d6b:0003 Linux Foundation 3.0 root hub Bus 003 Device 001: ID 1d6b:0002 Linux Foundation 2.0 root hub Bus 002 Device 001: ID 1d6b:0002 Linux Foundation 2.0 root hub