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I have a few servers that have been booting from USB for years. Two of my old freenas boxes (now just hosting backups of data from unraid), have been booting off the same USB sticks for almost 10 years now. In addition to the freenas boxes I use internal USB drives on Unraid, ProxMox, and ESXi hosts (had to try them all).
Its a risk, but having a cloned USB as a backup can mitigate it a bit.
So just... Waiting for failure then? ;)
As for me, give me an HA cluster and I don't care if I need to reinstall. I don't need to worry about an additional point of failure (USB drive) that is almost always going to fail before any of the other hardware.
It's part of why absolutely nothing important ever runs on a raspberry Pi for me though, SD cards are no better.
Now as for my favorite example of why I don't do it in production? Someone doing a bit of minor maintenance in the rack, accidentally pressed against a box running esxi off USB (on a gen 6 HP for rough timeline), broke the drive.
The backup? Well, it had corrupted, and wouldn't boot.
Oh man, that would suck. I do not ever use an external USB port for that exact reason! Aside from a few desktops and laptops around the house all my equipment has an internal USB port for the purpose of a boot drive (I always assumed that was the reason).
All production stuff needs backups. Personally I try to keep boot device backups saved to another device as an image so if one goes down, I can clone it to a USB real quick and restore the blink to the lights; ideally I should also keep them off site, but I don't like to use cloud providers (tin foil hat and all).
Wasn't my rack, thankfully, so it was someone else's problem.
But anyway even internal you're just leaning on when the thumb drive will fail vs an SSD and the onboard controller. So give me that SSD and HA any day of the week, but that's my comfort level. I even do it at home with my proxmox clusters.