I'm having the same problem, but with 12611 and DL2.11. I tried downgrading to DL2.09 but it didn't help.
Unless I boot with my USB stick plugged it, it just won't show up in FSD2's File Manager or XexMenu. I've actually got FSD1 and a launch.ini on it, so it boots into that with it plugged in
XBE does detect it as a USB Device if I plug it in after booting but still it won't show in FSD2 or XexMenu. I tried another stick as well (both FAT32) and that doesn't show either.
I can't recall whether it's ever worked since upgrading to 12611 or if it was an earlier dash I last used it with.