initrd/kernel packed in ISO doesn't support exfat
Not supporting exfat is problematic for automatic detached signed ISO booting under Heads and other kexec based projects. Such resource of kexec/grub workarounds is at https://github.com/u-root/webboot an were merged under Heads as iso workarounds passed to kexec call under https://github.com/linuxboot/heads/blob/501d7da2be91d79375dd9c447387a60b1813b42c/initrd/bin/kexec-iso-init#L30
As of today, Tails supports ext3/ext4/fat32, but some other distrib ISOs made Heads move away of fat32 because exfat support went open source and mainstream, and permit file > 8GB in size (there are ISOs bigger then that) and fat32 can't support them, ext4 is too linux centric, ntfs is too windows centric exfat is the new thing, and most of usb thub drive bought are exfat formatted.
The simple solution is to add exfat support under https://gitlab.tails.boum.org/tails/tails/-/blame/stable/config/chroot_local-includes/etc/initramfs-tools/hooks/add_modules#L24