This is not a Winclone issue, but I saw a couple of old topics about it and I was looking for a solution.
Months ago I created a VMware machine and installed Windows 10 (1709) there, then I followed this video to move Windows from the virtual machine to an external SSD; everything was running smoothly and I started using Windows and making backups with Winclone.
A week ago I decided it was time to update to the latest version of Windows, 1903, but the OS replied: “Windows 10 couldn’t be installed. You can’t install Windows on a USB flash drive”.
I found the solution on this Microsoft page and I quote it here:
Download ISO: Windows 10 1607 Build [ed. this is an old post, choose the latest version]
[ed. make a backup of registry]
Navigate to: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control
Change the value PortableOperatingSystem from “1” to “0”
Reset. [ed. reboot Windows]
Mount ISO, run setup.exe.