As mentioned in an earlier thread, my old notes suggest that PC Exchange and disk imaging utilities play their part in how a particular version of the operating system handles floppy disks.

System 7.1 with no PC Exchange

A floppy disk can be formatted as 400KB MFS. Disk imaging tools work fine.

System 7.1 with PC Exchange 2.0.5 from System 7.5.3

A floppy disk can only be formatted as 800KB HFS. Disk imaging tools not tested.

Mac OS 8.0 with no PC Exchange

Format only as 800KB HFS

400KB MFS rejected by Finder (ie no read)

DiskCopy 4.2:

-- 400KB disk rejected when trying to create an image

DiskCopy 6.3.3:

-- 400KB disk rejected when trying to create an image

-- mount 400KB floppy image failed

-- write image to floppy worked! After writing an image, I could insert a different 400KB MFS disk and create an image. Mounting still failed