In Windows 7 - is it possible to create a "system image" on a non-NTFS-drive (exFat)? The drive is big enough and the file system supports big enough files.
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If your question is correctly understood the short answer is YES.
I do not know of any difference between FAT32 and "exFat" and assume that they are the same.
FAT32 can't handle files larger than 4 GB. That seems to be the only major difference between NTFS and FAT32.
I have managed to build a bootable Acronis 2019 rescue thumb drive using 651 MB of the thumb drive's available 1 GB. It is a non-NTFS-drive. It is FAT32.
That thumb drive works to make total partition and drive images to totally restore Windows systems (with all installed applications) to replacement drives and to clones.
Acronis total image backups are generally greater than 4 GB in length. The drives used here for Acronis total image backups have NTFS file systems.