Boot from the USB, and choose the FAT32 partition as destination and install Windows.To create a partition manually which will be the designated Windows installation destination, create a FAT32 partition using Disk Utility.Select all the individual files/folders in the Finder window and Copy (or Drag) them to the USB. Mount the ISO by right-clicking on the ISO and choosing Open. Note: There is some confusion whether the entire ISO is copied as a single file to a FAT-formatted device which does not support files larger 4GB. Copy the entire contents of your Windows ISO to this USB.You will also need to add the Bootcamp drivers to the USB as noted in step 11 of section Follow these steps if you downloaded version 5 of Windows Support Software in Install Windows 7 on your Mac using Boot Camp - Apple Support. Bootcamp 4/5 drivers from Apple to the root of the USB for W7/W8.1, as appropriate.
These can be downloaded using BC Assistant -> Action -> Download.
Note: If you use W10 1903 or later ISOs from Microsoft, the install.wim is larger than 4GiB, and will not fit on a FAT32 USB.