if you do the file command on the memstick .img it looks like it has 2 partitions a DOS/MBR boot partition and a "data section".
same file command on an ISO tells you it 9660 CD-ROM filesystem data with a DOS/MBR boot sector.
Exactly, img file is a data dump of a block device which for PC is per MBR format - the boot record.
CD's (9660) don't have a boot record, they use El Torito extensions, the boot image is located through the catalog entry, hence why PC BIOS didn't support booting from CDs early on. They also support modes of emulation so boot image can be directly presented as FDD or HDD image via the PC BIOS, this is what Windows 95/98/Me bootable CDs use. They have a diskette .img on the CD that is mounted as virtual drive per El Torito via the system BIOS.
But on 9660 the PVD doesn't start on the start of the media, there is a 32kb gap called System Area which is sort of undefined, blank for all ISO 9660 cases. This is of course all addressed via LBA blocks. So you slap on MBR in this gap, and set a bootable entry to the start LBA of the data partition. Now you can boot this image directly. If you burn it, 99.9% chance burner software won't even read these bytes from ISO, and even if it burns them, the El Torito boot process won't be changed at all.
Perhaps the USB making software is confused what of 4 scenarios for bootable CD is at hand.