First, I've had my system since the beginning of May, having preordered a long time ago, and I've done a lot of playing around with it. It definitely has it's quirks.
The errors you encountered are almost certainly due to the usb drive you are using. I tried several brands of terabyte, and a few 512 and 256 gig thumb drives to get things working correctly. What I noticed was that if the process of writing to the drive when creating Windows To Go on Windows or booting was exceedingly slow on the Atari (more than an hour), there would be failures. I ultimately used a Window To Go certified device to get it going. Using a wtg certified device had the Atari up and running in about an hour and a half give or take.
Win2USB is a terrible product imo, it does what it says, but it costs an exorbitant amount for what it does do. Use Rufus instead; this is 100% free and works absolutely fine, and supports writing a VHD without paying cash (you can find many articles on Goog using Rufus to create a WTG).
While I have successfully installed and bench tested both RAM and M2, after testing I removed both to return the AtariVCS to stock. I will be performing the upgrade again because performance is a whole lot better, even in 4K res, however I currently need the Atari to stay stock while I do a few projects with it. Currently I have WTG running on an inexpensive ADATA 2TB external HDD (yes, a spindle). I have installed MAME, ColEm, Stella, Daphne (get the Daphne GTG release from the library Archive.org for perfection!), ad infinitum with ROMs and have had no issues with running anything emulated up to and including PSOne/PSP and GameCube ( I have not attempted PS/2 or WII yet, but will soon). The only problem, and it's a big one, is the data speed. While my drive is USB 3.1, being a spindle, coupled with USB external, it is slow loading. I just boot, go make a coffee and grab a smoke. By the time I'm done, it's snappy enough to not make me angry.
For controller support in Windows there's an obscure, but published easy fix - turn it into an xbox controller by holding the buttons beside the Atari logo down simultaneously (curved back arrow/hamburger). The Atari logo will flash and, once connected to Bluetooth, will turn off leaving only the four status lights below turned on. It's now an Xbox compatible controller and works much better with windows. I have not tried with the classic sticks yet because that's probably pointless with only 6 buttons, the stick, and the paddle - also of note, pushing the joystick down is one of the buttons 😉 On the AtariOS side I haven't bothered with Netflix etc because it's redundant, but I hope they fix the control issue. I believe, however, that you can click the left stick down to get a virtual keyboard, but I would have to check.
As far as PC titles on Steam, I can play GTA 5 well enough without resorting to uberporato mode so that was a definite plus, and even managed No Man's Sky, which is playable, but the settings are very low, and you WILL get a warning about memory running the stock Atari, but Hello Games was smart enough to allow it to play anyway. Also I've been collecting Epic freebies for just this purpose. Everything Epic I've tested runs pretty well from the Epic freebie pool. Even Control works decent on low settings.
Will I ever use this for serious gaming? No. I'll play Epic freebies on the PC side of the Atari (yes that was a swipe at Epic), and I'll definitely be enjoying Pinball FX3 using Steam on my 65" TV. I may use it to link Steam to play Far Cry 5 or import AC Valhalla to Steam to play on 65", but I usually prefer sitting in front of my rig for that. What I will do is play a whole whack of games I haven't seen since I was 7, and have a whole lot of fun with it figuring out what I can and can't do with it. Truly, I think that's the point that Infogrames (the current owner of the Atari brand) was going for. Much like the original Atari Video Computer System/2600, this unit can both surprise and disappoint. I find the AtariVCS to be more akin to the Atari 8-bit computers, not the greatest piranha in the pool, but it's fun as hell!