Greetings,
I ran into the same problem with the Microsoft Surface Pro 3 TPM Update Tool failing when trying to format the USB flash drive.
I was trying to create the bootable USB flash drive on the Surface Pro 3 directly and not on a separate computer.
I also have a docking station that my Surface Pro 3 sits in so I can use it like a desktop computer.
I did the following while running the Update Tool in both standard and administrator modes:
- I used a 16GB USB 2.0 flash drive formatted as FAT32 - FAIL
- I used a 256GB USB 3.0 flash drive formatted as NTFS (exFAT and NTFS were the only format options) - FAIL
- I went out and bought a brand new 16GB USB 3.0 flash drive formatted as FAT32 - FAIL
- Using the newly purchased 16GB USB 3.0 flash drive, I tried 3 different USB 3.0 ports (the one on the Surface Pro 3 itself and two on the docking station) - FAIL
After these attempts I finally found what worked on my Surface Pro 3:
- I created a new local user account and set it as an administrator and I was able to create a bootable USB 3.0 flash drive using the Update Tool under this new account.
- I had to set the UEFI boot order to be USB first for it to boot from the bootable USB flash drive. Plugging the bootable USB flash drive in did not boot from it automatically. This was the only step missing in the TPM update instructions.