An internet connection is required to install macOS?

I have a USB flash drive with a freshly built USB bootable installer for macOS 12.3 (with the downloaded firmware assets) that was built on a different Mac.

I'm upgrading an Intel Macbook Air, with a T2 chip, from Catalina (10.15) to Monterey. For reasons not to be addressed further, this computer is not permitted to connect to the internet in any way, which was the reason for downloading the installation media and assets to an external USB from a different computer.

I boot to the current OS, insert the USB, copy the Install Monterey app to the desktop and run it.

The installation errors at about 40% complaining about an internet connection being required to install macOS.

How do I upgrade this computer without network access?

Obviously using Internet Recovery is NOT AN OPTION due to the need for network connectivity. Alternate boot options do not work because of the T2 chip forces the system into Internet Recovery and as stated earlier, Internet connectivity is not an option.