When an OS is installed on a HDD and system is booting in UEFI Mode, it requires a seperate ESP partition to store all the boot files required by UEFI boot manager like bootloader and stuff, however the system files (root filesystem) are stored on separate partition. Now coming to (Liveboot USB)/Installer for UEFI boot manager, we simply create a gpt partition table, create a fat32/vfat partition, copy the contents of iso file of OS and then its ready to boot. Question is why don't we need a separate system partition, Does UEFI boot manager not need a seperate ESP partition in this case? Where am i wrong in my observation?
Because the whole external boot media is FAT32 which one probably wants to avoid for as much of the real system's disk space as possible; you might also find Rod's books on UEFI useful (that's what helped me implement UEFI support in ALT Linux, for one).