Hey @Fire and welcome to the forums!
I gave it a shot, personally, but I didn’t persist too much on the subject. I did a test on my T2 MacBook Pro 16" a few months ago. There is a process to allow booting from an external drive, which you’ll need to activate in the “safe” boot mode of macOS, under the security settings. I’m including a link on how to do that in the end of this post. This allowed me to boot Linux from the USB.
One thing you should be extremely careful of, when you try an installation to the external drive, is the following:
When it prompts you about where to install Linux, make sure you select Something else - as in manual partitioning. This is imperative. The reason is not as to which drive Linux will be installed, but the location of the boot loader. When you go manual, you have the selection on where to place that Linux boot loader. Under no circumstances should you select any automated boot loader installation and avoid installing any distro that does not give you the option to select the location of the boot loader install area. It will damage your macOS.
With that being said, when you enter the manual partitioning, select your external drive. You should then make three (3) partitions:
- The boot partition (usually EFI as its file system) and flag it for format and the /boot as mount point. Also, if you see the “boot” flag when you’re setting it up, select it. This partition should be anything between 512MB to 1GB.
- The Swap partition. This is your virtual memory, should your system run out of RAM. The ideal size is to set it equal to your system’s RAM (i.e. 8192MB for an 8GB RAM system). Select its filesystem to be swap. There is the option to also have hibernation for your system, if you select the swap partition to be 2x the size of your RAM, but I would not recommend it as you may hit some glitches.
- The last partition is your root one. That’s where the main OS will reside and is mounted at the / point. You can select this to be EXT4.
Once you are done setting those partitions, double-check that you select the boot loader (Grub) installation to be on your external drive.
Depending on the distro you selected, if you try to boot from your newly installed Linux on the external drive, you might still get a black screen. That’s something I faced on my MBPro. The two distros I hear recommendations about are PoP_OS and Manjaro.
Below is the link on how you can set your T2 iMac to allow booting from an external device: