systemd-sysinstall with Live System configuration is failing with mkfs

I just built the latest particleos. I am booting the image with mkosi vm and try to install the image to the attached drive using the Live System profile.

truncate -s 20G ~/blank.raw
sudo ./mkosi/bin/mkosi vm -- \
  -drive file="$HOME/blank.raw",format=raw,if=virtio

The selected disk has enough free space for an installation of the OS.
The selected disk contains no partitions, proceeding.

🚀 Type 'yes' to register OS installation in firmware variables of the local system, 'no' otherwise: yes   

Summary:
       Selected Disk: /dev/vdb
          Erase Disk: no
Register in Firmware: yes
              Locale: C.UTF-8
            Timezone: Europe/Stockholm

⚠️ Please type 'yes' to confirm the choices above and begin the installation: yes

🔐 Encrypting credentials...
Encrypting credential 'firstboot.locale'...
Encrypting credential 'firstboot.timezone'...
💽 Installing partitions...
Applying changes to /dev/vdb.
Wiped block device.
Discarded entire block device.
Successfully wiped file system signatures from future partition 0.
Successfully wiped file system signatures from future partition 1.
Successfully wiped file system signatures from future partition 2.
Successfully wiped file system signatures from future partition 3.
Copying in '/dev/vda2' (16K) on block level into future partition 1.
Copying in of '/dev/vda2' on block level completed.
Syncing future partition 1 contents to disk.
Block level copying and synchronization of partition 1 complete in 3.649ms.
Copying in '/dev/vda3' (400M) on block level into future partition 2.
Copying in of '/dev/vda3' on block level completed.
Syncing future partition 2 contents to disk.
Block level copying and synchronization of partition 2 complete in 2.009457s (199M/s).
Copying in '/dev/vda4' (462.7M) on block level into future partition 3.
Copying in of '/dev/vda4' on block level completed.
Syncing future partition 3 contents to disk.
Block level copying and synchronization of partition 3 complete in 2.084951s (221.9M/s).
Formatting future partition 0.
mkfs binary for vfat not available.
Informing kernel about changed partitions...
Failed to issue io.systemd.Repart.Run() varlink call: Protocol not supported

Exiting first boot settings tool.

The sysinstall in the Installer profile works though.

Partition table written.
💽 Mounting partitions...
💽 Installing kernel...
Will create commit 1.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501.conf' for profile 0.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501@1.conf' for profile 1.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501@2.conf' for profile 2.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501@3.conf' for profile 3.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501@4.conf' for profile 4.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501@5.conf' for profile 5.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501@6.conf' for profile 6.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501@7.conf' for profile 7.
Writing new boot menu entry 'efi/loader/entries/ParticleOS-commit_1.20260903095501@8.conf' for profile 8.
Installed 'ParticleOS_20260903095501_x86-64.efi' into place.
Installed 'firstboot.locale.cred' into place.
Installed 'firstboot.timezone.cred' into place.
Installed 'ParticleOS-commit_1.20260903095501.conf' into place.
Installed 'ParticleOS-commit_1.20260903095501@1.conf' into place.
Installed 'ParticleOS-commit_1.20260903095501@2.conf' into place.
Installed 'ParticleOS-commit_1.20260903095501@3.conf' into place.
Installed 'ParticleOS-commit_1.20260903095501@4.conf' into place.
Installed 'ParticleOS-commit_1.20260903095501@5.conf' into place.
Installed 'ParticleOS-commit_1.20260903095501@6.conf' into place.
Installed 'ParticleOS-commit_1.20260903095501@7.conf' into place.
Installed 'ParticleOS-commit_1.20260903095501@8.conf' into place.
Successfully installed boot loader entries 'ParticleOS-commit_1.20260903095501.conf', 'ParticleOS-commit_1.20260903095501@1.conf', 'ParticleOS-commit_1.20260903095501@2.conf', 'ParticleOS-commit_1.20260903095501@3.conf', 'ParticleOS-commit_1.20260903095501@4.conf', 'ParticleOS-commit_1.20260903095501@5.conf', 'ParticleOS-commit_1.20260903095501@6.conf', 'ParticleOS-commit_1.20260903095501@7.conf', 'ParticleOS-commit_1.20260903095501@8.conf'.
💽 Installing boot loader...
Created directory "/run/systemd/mount-rootfs/efi/EFI".
Created directory "/run/systemd/mount-rootfs/efi/EFI/systemd".
Created directory "/run/systemd/mount-rootfs/efi/EFI/BOOT".
Created directory "/run/systemd/mount-rootfs/efi/loader".
Created directory "/run/systemd/mount-rootfs/efi/loader/keys".
Created directory "/run/systemd/mount-rootfs/efi/loader".
Created directory "/run/systemd/mount-rootfs/efi/loader/entries".
Created directory "/run/systemd/mount-rootfs/efi/EFI".
Created directory "/run/systemd/mount-rootfs/efi/EFI/Linux".
Copied "/usr/lib/systemd/boot/efi/systemd-bootx64.efi.signed" to "/run/systemd/mount-rootfs/efi/EFI/systemd/systemd-bootx64.efi".
Copied "/usr/lib/systemd/boot/efi/systemd-bootx64.efi.signed" to "/run/systemd/mount-rootfs/efi/EFI/BOOT/BOOTX64.EFI".
Created directory "/run/systemd/mount-rootfs/efi/ParticleOS".
Created EFI boot entry "Linux Boot Manager".
Created EFI boot entry "Fallback Linux Boot Manager".
💽 Unmounting partitions...
✨ Installation succeeded.
↻ System will reboot now.

Start with the Live System profile and reproduce the failure using the shown mkosi vm command and blank raw disk. Compare its installation path with the working Installer profile, focusing on the missing vfat mkfs binary and the subsequent repartitioning error. Done means the Live System installation formats the EFI partition and continues successfully.