According to Microsoft:
For Advanced Format 4K Native drives (4-KB-per-sector) drives, the minimum size is 260 MB, due to a limitation of the FAT32 file format. The minimum partition size of FAT32 drives is calculated as sector size (4KB) x 65527 = 256 MB.
I am a little lazy to dig into the specifications of FAT32 filesystem format. Just a quick question: why is the minimum partition size not 256 MiB but rather 260 MiB instead? What is the additional 4 MiB used for?
Edit: I have conducted a test with my 512-byte (maybe emulation) SSD. diskpart.exe refused to format a 32MiB partition as FAT32. Even a 35MiB partition failed to format. It only accept 36MiB as the minimum size to format.