Impossible to boot from external SSD - stuck in installation loop

My mid-2015 27" iMac was running fine and one fine morning it just froze. After hard restart, I got the infamous barred circle logo and was invited to consult Apple Mac Support page.

Rebooting in safe mode using Command+R, I had the option to reinstall macOS Ventura. However, no available disks were detected. This led me to suspect a damaged disk.

So I got an external SSD (Samsung T7, 2T) and formatted it so that it has a small 32Gb partition as macOS extended journaled with GUID partitioning and the remaining space was ASPF/GUID. Then I used my MacBook Air to create a macOS boot (so far I tried Ventura, Monterey and Big Sur). I can successfully make the macOS bootable system on the small 32Gb partition using Apple's guidance from Create a bootable installer for macOS - Apple Support

Restarting iMac with option key pulls up the option to start from the boot (either Big Sur, Monterey etc, depending what I had on it). I connected to WiFi. Installation goes fine and then the machine restarts, apple logo comes with "About 29 min remaining", and then around 18 min remaining, it restarts again, apple logo comes with "About 29 min remaining" and so on and on. Infernal loop.

Tried with USB flash having the bootable installer and T7 fully formatted, tried different boots (Ventura, Monterey, Big Sur). Used Disk Utility in SafeMode to erase some 128 Gb internal partition and tried installing on it from the boot - no luck.

What in a World is going on? It should be simple: boot from installer and install on external, properly formatted SSD. Except, it isn't simple.

Please - help!