I looked around for a while until I found this article, by far the clearest and easiest to follow.
But if I erase the drive using Mac OS Extended (journaled) for the format the process works fine. Step 2: A boot menu will appear, here, select to choose "Disk Utility". Select the parent folder for the drive you want to reformat or erase, then click the Erase button again. Select Main Drive (not volume, that's what's causing the problem) Now click "Erase", enter name, select OS Extended (Journaled), and Scheme is "GUID Partition Map". Next, access Disk Utility from the boot menu. If Disk Utility failed to repair the disk, and the Macintosh HD not showing in Disk Utility issue remains, then you can try another macOS utility - Terminal to fix the hard drive not mounting issue. Now, select the external device from the sidebar and click on the "Erase" button. What Disk Utility looks like in Lion through Yosemite. As it turns out, a lot of affected users that were also dealing with this issue on macOS have managed to fix the issue by using Disk Utility to create a new partition map by forcing the utility. Can't tell from my own experience if the problem is related to the T2 chip or to Catalina, but had to use an older Mojave based Mac to succeed creating the bootable USB stick. Eject External Hard Drive with Disk Management.
I was getting things like: "could not modify partition map" and "couldn't unmount disk." Whatever I do, I keep on ending up with the message 'Disc erase failed couldn't unmount disc' I am currently in grey screen with OSX Utilities and internet access only. Step 2: Type Disk Utility in the search field. Recovery mode was OK but couldn't erase the boot volume nor mount it via Disk Utility (I just got "Unable to delete the core storage logical volume. Nothing would make it boot normally again. Couldn't repair, said to reformat, but couldn't erase anything either. Open Spotlight Search by pressing the Command key + Space bar.