Okay, anyone tracking this thread, I finally got it to work (at least a band aid workaround).. this is clearly on Samsung's side for why this is not working.
If you plug in the USBC drive to the phone, it will not work. What you have to do is plug the USBC drive in, and restart the device. Upon boot up is when the flash drive will work.
If you unplug the device, you will have to restart the phone again for it to detect the USBC drive again.
I know it's not a fix per se, but at least you can use the drive until Samsung comes up with a permanent fix.
EDIT: Not sure if this will contribute to it, but I had USB debugging on, so if the instructions above do not work for you, try going into developer mode and doing the steps again.
Same here, I had to power the phone down with the the USB card reader plugged in. Then I had to do it again so it would read my SD card already in the phone. This is WACK