If Windows Setup cannot see the USB drive, then your Windows boot files (boot.wim) does not contain the correct USB controller drivers for that specific system.
For instance, Windows 7 does not contain USB drivers for new USB 2 and all USB 3 controllers and so will not be able to access the USB drives on newer computers.
If you make a bootable USB drive using the same ISO with RUFUS, you should get a similar problem.
For instance, Windows 7 does not contain USB drivers for new USB 2 and all USB 3 controllers and so will not be able to access the USB drives on newer computers.
If you make a bootable USB drive using the same ISO with RUFUS, you should get a similar problem.