Isn't fat32 a deprecated filesystem format?
Why does grub for efi booting is still required to be installed on a fat32 partition?
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EFI-based systems boot using an EFI system partition, whose format is defined in the EFI specifications. This format is based on FAT, but is maintained by the Unified Extensible Firmware Interface Forum. What happens to FAT now has no effect on the EFI system partition format itself.
So whether FAT32 is deprecated or not, you’ll still see EFI system partitions with a FAT-based format, for a long time to come.
UEFI systems are able to boot only from FAT12/16/32 partitions (and ISO9660 for optical disks):
This is where this limitation comes from.