M1 iMac - most recent OS update and external drives won't work

Good question. Two screenshots included—Disk Utility and System Profiler. My Time Machine drive won't show up in Disk Utility or even allow the Intel MacBook Air to start up - had to plug it in after it booted up. Interestingly (and I cannot explain why) I see that the Time Machine drive was formatted to FAT32. I didn't try each drive separately because I thought both external drives were OS Extended Journaled (since they're older). But now knowing they are different, plugging in the OS Extended Journaled drive, my iMac will start up.

Must be something with the FAT32 dive, although, I don't understand why it's worked up util that last update.

I'm now reading that mechanical drives (like I'm using for my Time Machine backup) shouldn't be used with APFS. Could just be a bad coincidence that this drive failed when I did the OS update, but I've had many drives fail over the years and never has a failed drive caused my computer to not startup. If I have that drive lugged in and try to start up my computer, it hangs up. As soon as I unplug it, it starts up. Crazy.

The drive you see in the Disk Utility screenshot is connected directly to the iMac and seems to be working now.

The Time Machine drive is older and I'm using this Anker hub - https://www.amazon.com/gp/product/B07DFYQXY7/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1

I can see it maybe needing more power, but seems odd that it was fine up until that OS update.

Thanks for your input. When I setup this M1 iMac, I reformatted a drive to use with Time Machine and most likely picked APFS because that was the default that came up. Freak coincidence is making the most sense now, but the fact that when plugged in, it won't allow me to start the computer has me stumped now. The only issue I've had with bad external drives I've had in the past, is that they just don't work. Never had a computer not start up because of it. And this is the case with the Intel MackBook Air and M1 iMac—if that drive is plugged in, they won't startup.

Thanks everyone for your input/help.

Yes, that's what I'm reading now. I'm baffled why it is showing being formatted as FAT32, but really don't understand how it was working as a Time Machine backup just fine until last Friday.

No, only the Time Machine drive.

Did a test with another external drive to see if it could be a power issue with that USB C hub. This is the exact same drive that I'm having trouble with except it appears to be formatted to Journaled HFS+. This drive shows up in Disk Utility and I can restart the iMac and it turns on just fine. Here is the system profiler info for it.

Is it possible that the OS update corrupted the Time Machine drive? Or just a coincidence it stopped working after the update?

Sorry, I think I was reading the System Profiler info wrong. While it does say FAT32 under EFI, it also says Apple APFS under disk3s2.