One possible reason :
To run the USB , u need a certain amount of power from the source and in this case , your Note 2 . Chances are your 16G requires higher power supply then Note2 can supply , that's y u cant use your 16G . It doesn't mean u can't use a 16G USB , only that particular USB .

oh i see i tot there was gona be a clash in the system defult settings to overclock to required speed and software preventing it from going any higher 

because im a very cheepo and LOVE this fon,so im planing to underclock it most of the time to prolong the life span of the device..muahahahaha