@mitu thx...there seems to be some misleading information on the page you linked...and i seem to have picked the wrong info...

0x4 USB-MSD USB mass storage boot - See USB mass storage boot

BOOT_ORDER Description
0xf41 Try SD first, followed by USB-MSD then repeat (default if BOOT_ORDER is empty)

0xf14 Try USB first, followed by SD then repeat

funnily, i had (tried to) changed it from gui...and selected the option: boot from usb, fallback to sdcard...

let me try changing it to 0xf41... i'll report back

edit: I changed it:
rpi-eeprom-config
[all]
BOOT_UART=0
WAKE_ON_GPIO=1
POWER_OFF_ON_HALT=0
BOOT_ORDER=0xf41

and now i don't even see the bootloader screen anymore...instead it directly boots retropie from sdcard

edit2: 0xf14 is the correct mode... problem is not with retropie nor with the config.
I now have tested an usb-stick with recalbox, and it boots just fine... previously i tried to boot lakka 64bit from usb, which did/does not work.
I guess i need to check lakka forum for support...

The EEPROM is outside the OS, so changing the OS wouldn't have helped.
As I said, you'll need to use the stable version to get USB-MSD boot working, by default rpi-eeprom-update will use the critical update version - as you found out in your latest update.

The safest option would be be to install the latest Raspberry Pi OS Lite - which should have the USB boot supporting firmware on the/boot partition - on the USB disk, then perform a Manual install of RetroPie. The EEPROM bootloader is already updated, so USB boot should work.

@fiatfan
Semper fi.

We don't support 3rd party images.

PINN allows you to install Retropie directly to an USB stick. https://www.raspberrypi.org/forums/viewtopic.php?t=142574