For what it's worth, I had the same problem trying to update the OS on my SDS1204X-E. The ADS update went fine, but the unit would not boot from an 'empty' flash drive. I have several 4 GB drives and I just purchased a brand new 32 GB drive. None of them worked as a boot drive, even after I deleted everything and EACH drive reported itself as a FAT32 partition to Windows. After some sleuthing it appears that, unless you specifically format the USB drive as a FAT32 partition prior to copying the OS files over, that it is possible that new drives contain "special" software in the boot sector used for security and other Mfg-specific things that interferes with the boot process on the scope.
After I reformatted one of my 4 GB flash drives as FAT32 and copied the files over, the OS update finished perfectly in about 20 seconds. I really don't know what was different because nothing changed in the file explorer window in Windows. I'm using Windows 10, BTW.
Hope that helps!