> 1. When ZTree hangs only the spinner keeps going. Nothing in the
> display gets updated (eg the elapsed time stays the same).

Can you watch the size of the (new) target file while this is happening?
The copy operation is done on the main thread, so until the last write request completes, nothing else is going to happen in the display.
So while it appears to be hung, I'm pretty sure it's simply waiting for Windows to come back from the last write operation. This is probably then a buffering/caching issue.

> 2. If I do manage to kill ZTree without removing the stick (with the
> task manager - which takes a long time over a minute) then the delayed
> write failure message comes up and the stick's drive becomes invalid
> until the stick is removed and reinserted.
>
> 3. I have checked that the policy setting for the stick is "optimize
> for quick removal" so writes should not be cached.

Can you see what happens with write caching enabled?

> As mentioned in the main post there are no problems whatsoever when
> using the /API switch.

I'd really like to make /API the default, and do away with ZTree's internal copy function.
It was necessary back in the days of Win9x (for allowing interruption, and progress reporting), and comparable performance-wise to the API function, but I think those days are over.
The only 'advantage' ZTree's copy function has now is the preservation of creation and last-access timestamps - but this could easily be done after the use of the API copy function.
And of course Alternate Data Streams would be copied by default - I wonder if anyone is not using /API today specifically to avoid this.