Aartak When you create the Flash drive with batocera, there's 2 partitions. One is FAT32 (yes. FAT32. Not NTFS, not EXT, not brtFS...) and 3 GB size called "BATOCERA". 2nd partition is created by the system itself when is booted for the first time and it's a EXT4 type, called "SHARE" .
Your partition is correct. Your problem it's booting.
You got a spare PC or old laptop around? Try a fresh installation on other HW and see if it's the flash drive or your PC/Laptop. If it works, try the rEFInd solution and change boot to UEFI.
Trust me! It happen the same to me. I tried and change partition on Gparted several times(changing flags, MBR to GPT, changing size partition, etc...) and the only thing that works was rEFInd on this particular Laptop. Make your flash drive with rufus. Etcher won't work.
Now, why FAT32? Don't know. I suppose that Batocera has its base on Recalbox, and since Recalbox also use FAT32...also, compatibility? (CMS/Legacy - UEFI support on almost everything. NTFS won't work on old HW. EXT is not supported on several BIOS/UEFI boot...)