I came to conclusion today that something has definitely changed on these units with USB-C ports. Ohh and let's not forget, it is not a USB-C issue. Honda seems to have bonded with Google now and anywhere google poke its nose, you have to follow its rules. For sure they try to push you to stream via apps in the console but that's not what everyone is interested. I have a large local collection that I was playing fine on my passport 2023 and now it is just not recognizable by the head unit on 2026 model.
I formatted today three usbs with 128MB in size, 8GB and 32GB(as a max defualt for FAT32) as exFAT, FAT32 with various block sizes, from 16K and default. Copied MP3, WAV and FLAC, one format at a time and It just does not work with any of them.
Same USB is plugged on Honda Odyssey 2023, or Passport 2023 and work fine. All WAV, FLAC and MP3 work flowlessly in 2023 year, which somehow has the USB-type A port. Not sure if this has to do anything. I plugged the USB-C drive on laptop with USB-C port and all autio files play fine via VLC.
It was interesting that Golddog user has used a USB-C to USB-A adapter and it works? That would be stupid though, if iit works that way.
I think we should thank Google for this, I'm pretty sure they have restricted this port as it is hard to track what you're playing from this port
I will try to buy a USB cable C-male to Type A female and try as Golddog suggested and report back. Using an adaptor will physically make the plugged device way too long and could be subject to damage the small USB-C port in the unit.