The DiskUtility app for Mac does not support FAT32 within the GUI. You can, however, format a USB flash drive in MacOS from the terminal.
✓ Option 1: Use newfs_msdos
#Insert the drive -> open Terminal -> List your disks
diskutil list
# Identify your USB (e.g., /dev/disk2) -> Unmount the whole disk
diskutil unmountDisk /dev/disk2
# Create a new FAT32 filesystem
sudo newfs_msdos -F 32 -v MYUSBNAME /dev/disk2s1
# Eject it when done:
diskutil eject /dev/disk2✓ Option 2: Use diskutil
#Insert the drive -> open Terminal -> List your disks
diskutil list
# Format the drive (ensure the name is correct)
diskutil eraseDisk FAT32 MYUSBNAME MBR /dev/disk2