Mac does not allow you to partition a drive formatted in FAT32, and it has nothing to do with the size of your drive.
If you want to partition the FAT32 USB drive on your Mac, you need to change the format to a native Mac one, such as APFS or Mac OS Extended (Journaled), then click the ( + ) button to add a FAT32 partition. If you want both partitions formatted as FAT32, you can erase the Mac partition again.
You can find more details in this guide: [Fixed] Can't Partition SD Card/USB Drive/Hard Drive on Mac?
