I still can't understand what exactly you are doing, the link you posted is about initializing unallocated space. How do you get unallocated space on the USB disk, since WinSetupFromUSB uses all available space?
Do you shrink partition beforehand? Using which tool?
In short- the steps you are doing are corrupting FBinst data. But you do need to say exactly what those steps are, so we can spot eventually what you are doing wrong.
Alternatively, you can try to rewrite FBinst data back to disk, using fbinst or FBinstTool if FBinst space in the beginning of the disk is intact.
fbinst (hd1) restore
fbinst (hd1) update
Or you can shrink the existing partition and utilise the unallocated space using another tool.
Or you can avoid using FBinst auto format option and use BootIce for example, create the partitions as you like, install grub4dos MBR and let WinSetupFromUSB do the rest. When auto-format option is not checked, and there is grub4dos MBR it will not touch partitions and MBR.