External drives · Drive formats
Why does Storage Studio warn about exFAT drives?
Short answer: exFAT isn't a Mac format: it handles permissions differently and the shortcuts Storage Studio leaves are more fragile on it. It works, but APFS is recommended — or give the drive a separate APFS volume for Storage Studio.
exFAT works, but it isn't a Mac format: it doesn't keep Mac permissions the same way, and the shortcuts Storage Studio leaves behind are more fragile on it. That's why Choose Drive gives exFAT an orange usable with warnings verdict and the confirmation asks you to Use Anyway rather than simply continuing.
People usually keep exFAT so the drive also works on Windows. If you need that, consider splitting the drive into two volumes in Disk Utility — an APFS volume for Storage Studio and an exFAT one for sharing — or use a separate drive for sharing.
For anything you plan to run apps from, APFS is the recommended format.