What you write about is the modification of the USB stick firmware using the service tools of the controller manufacturer, e.g. Phison (MPALL), which changes the drive to a USB-CDROM.
On the other hand, some ISO images can be writed directly sector by sector to a hard drive or USB stick, e.g. this one: openmediavault_0.2_i386.iso and of course, the computer boots up from such a flash drive without any problem.
It is still in the Windows as a removable drive, but for example WinHex sees the CDFS file system there:
Only FYI, the "of course" in your sentence is gratuitious
What WinHex "sees" is pretty much irrelevant, in the sense that Winhex (as well as many similar tools) may be able to see "much more" that what the actual OS or BIOS can see.
A number of BIOS won't boot from non partitioned sticks, many will, it goes on a case by case basis, a partitioned media will boot - say - in 95% or 98% of cases whilst a "superfloppy" maybe in 30% of cases and a "direct CDFS" on 0%, unless it is not a "normal" .iso/CDFS but rather an iso-hybrid one (i.e. an image that has additionally a MBR), a number of Linux based mini-distro's are released in this form,.with an image that can be either burned to CD/DVD or dd-ed to a USB stick.
Specifically, this is the case for the image you linked to, if you actually open its first sector in WinHex (or other hex viewer/editor) you will see how it contain a "normal" isolinux MBR, in other words, applying the image to the stick will result in a partitioned stick (with only one partition amd with some "queer" values in the partition table).
A non-hybrid .iso, by definition, has the first 16*2048=32768 bytes set to 00, i.e. the actual CDFS starts with a header of 01 43 44 30 30 31 01 on the 17th sector (2048 bytes/sector) and anything before it is unused.
What the "manufacturer's tool" (if it exists and when it works) allows instead to have on stick are two LUN's (to all effects two devices) of which one is a CD/DVD device and one a "normal" mass storage one (superfloppy or hard disk like).