Just spent hours trying to install macOS 26b2 on an external SSD. After rebooting, it just wouldn't complete but boot back into macOS on the internal SSD eventually.
Why? I had plugged the SSD into the wrong USB-C port: on Apple Silicon Macs, you're supposed to NOT use the DFU port for this (https://support.apple.com/en-us/111336) - and of course I had. 🤦♂️
This document tells you which of your Mac's ports is the DFU port:
https://support.apple.com/en-us/120694
Avoid that port when installing macOS on a external drive.