Question: I'm aware there are floppy emulators that are installed to 3.5″ bays where disk images are stored on a flash drive. But what I need now is the opposite: essentially a USB dongle that emulates the floppy drive hardware with a disk inside. Something that older OS installers would recognize.

The need came up when I tried to install Windows XP on a laptop. The only way to load the AHCI drivers is via a floppy drive. I have a USB floppy drive, but no disks at the moment :( and obviously there is no 3.5″ bay to install the typical emulator in a laptop.

I know I can always just buy some floppies, and in fact I have some on the way, but given the reliability of floppies over time, I still feel that what I'm describing would often come in handy.

Does anyone make/sell these?

Answer: 
You can install XP in IDE mode and install the AHCI drivers afterwards, I did this on my netbook several times. I think it goes something like:

* Set disk controller to IDE mode in bios, and install XP.
* In device manager go to the disk controller and manually change the driver to the AHCI one.
* Reboot into bios and change disk controller to AHCI mode.
* Save and reboot, XP should now load successfully.

If you miss any step you will likely get the BSOD.
To boil down what others are saying:

A USB device itself is incapable of *making itself appear* as a traditional floppy drive, because USB devices don't have that kind of access.

However, if you're lucky, your BIOS will have support for USB floppy drives and *it* can apply the same virtualization trick that it uses to present USB keyboards and mice as PS/2 keyboards and mice for compatibility with old OSes.

If your BIOS *does* support that, then the USB floppy can appear as A: or B: for anything which uses the interfaces the BIOS's compatibility mode is providing.

If that isn't enough, then you need to search up how to slipstream stuff to build a custom XP install disc with the driver you need already present.