Windows 10 has no limits with floppy drive formats, it can read/write 3,5 ich, 5,25 ich, 320 kb, 640 kb, 720 kb, 1,2 MB, 1,44 MB, 2,88 MB. Most of them I could already test on a PC with a 3,5+5,25 compo drive (except of the last one as I have no drive/controller for that).
The limit is the USB drive. They work totally different from drives connected to the floppy controller of a PC mainboard.
(old fashioned) Floppy drives controlled by AT style floppy controller (onboard or addon card) in PC are quite flexible, allmost as flexible as WD1772/Ajax in Atari (and much less flexible than in Amiga), their limit is usually at 10 sectors per track (DD), or 20 sectors with HD drives. ATari can handle 11/22 sectors per track, as WD1772 is more flexibe in reducing sector headers, sector gaps, etc (See Scheibenkleister book). Mostly besides MFM they also can support old style FM format and so on, quite interesting to play with, for data exchange with older systens like even CP/M disk formats. This is because the floppy drive is raw controlled, the BIOS / Operating system itself handles with the floppy controller, handles the control signals (like step in/out, side select, etc.) by itself.
USB floppy drive is different. The PC BIOS / Operating system has no direct control of the floppy controller in such an USB drive, it can not control directly the RW-head. Instead, the USB floppy drive has it's own intelligence (like Atari 1050, commodore VC 1541 floppy drives - but less than these!) and only announces sectors (blocks) over USB to the host computer. The computer does not see tracks, sides and raw sectors. It sees what the drive intelligence announces to the computer. It works more or less the same way as an USB stick, just a number of sectors/blocks, that's all. And this intelligence is very limited, it only can read/write floppys of the standard formats, 1,44 MB, some older drives also 720k. But not more than 80 tracks and not 10(DD)/20(HD) sectors hyperformats.
To have luck with 720 kb support of USB drive, you need to test by yourself the drive you have. You should be on the save side by taking an older IBM/Lenovo USB drive (made by Ye-Data) or similar. I used to have a drive by DeLock, this did not support 720kB.
One thing is important. Windows 7-10 format floppy function in Explorer is quite limited, you can't select the density, for 5,25 inch default is 1,2 MB, for 3,5 it is 1.44, not changeable. You need to open the DOS command prompt (cmd.exe) and make it manually, like "format a: /t:80 /n:9" for 720 kB (the /f parameter doesn't work anymore since Win XP).
Power without the Price. It's not a bug. It's a feature. _/|\_ATARI
1040STFM in PC-Tower (PAK68/2, OvrScn, 4 MB, 1GB SCSI, CD-ROM...) * 2x Falcon 030 32GB/14MB+ScrnBlstrIII * 2x TT030 73GB/20MB+Nova * 520/1040STFM * 520/1040STE * 260/520ST/+ * some Mega ST * 2x Mega STE 500MB/4MB+M.CoCo * Stacy * STBook * SLM605 * SLM804 * SLM605 * SMM804 * SH 204/205 * Megafile 30/44/60 * SF314 * SF354 * 5x Pofo * PC3