No Option to allow booting from external drive. Macbook Air M2, 2022

The picture you posted for the Startup Security Utility is for the Intel T2 Macs generally from 2018-2020. M-series macs while they also have the Startup Security Utility will have different options available......and will not have any USB related boot options shown.....those USB boot options only apply to the T2 Macs.

I saw another post the other day where a user was having trouble booting from USB on an M-series Mac. While researching I discovered that when you go to install macOS onto an external USB SSD, you must not use the USB-C port dedicated for DFU Mode. On M-series laptops, the DFU port is the back left USB-C port. Once the full version of macOS has been installed onto the USB drive, then any of the USB-C ports can be used for booting the external USB drive. See the following Apple article for details (parts of the article are misleading & slightly incorrect such as the choice of file system.....APFS is required for macOS 10.15+ and all M-series Macs):

Install macOS on an external storage device and use it as a startup disk - Apple Support

Make sure to follow the "erase disk" link in that article for the proper way of erasing the external drive.

If you get any error messages, then we need to see a picture of the error message and tell us at what point in the process the error occurred. Please make sure any pictures you post are correctly rotated since iPhones/iPads tend to rotate pictures 90º when viewing them, so you may need to edit the picture to correct the incorrect rotation of the picture before posting it here (I ignore pictures that are sideways or upside down since they are too hard to view & give me a headache).

Make sure the external SSD is connected directly to the computer and disconnect all other external devices in case they are causing a problem. It is also possible the external drive you are using just may not be compatible as a boot drive.....Macs can be very particular about the drives used, especially for booting.

Any Mac should be able to boot from an external drive provided the drive is properly setup and directly connected. Also:

• Check how the drive is formatted.
• It must have an OS installed on it which the Mac can use.
• I would strongly recommend using only an SSD drive as mechanical drives are much slower.
• The drive should be connected with a USB cable.
• I would delete any included maintenance app that came with the drive as they almost always cause problems. Do not use it to format the drive.
• The drive must then be selected as the startup drive in System Settings.

I hope this information is helpful.

Yes. in System Settings we can select which displayed OS to use to startup from. If the external disk is not shown it cannot be selected. That means there is an issue either with the disk as I addressed above or that there is a problem with the OS you installed on the disk. If you downloaded the OS via Wi-Fi, that could be the problem, meaning it got corrupted during the download which often happens. It's better to use a wired Ethernet connection to do these downloads because they are so large and WI- Fi is often too slow. If Ethernet is not available, you may have to do multiple downloads to get one that works.