Well, that few hours of work took me completely NOWHERE!!!

OK, that's good to know as I am currently looking at using the media/removable check for each device to identify whether that device should actually be tested. Basically: if the media is 'mounted', we are good, otherwise we need to skip it.
....
Therefore, what your remark tells me is that I should be fine to use that IOCTL_DISK (08h) & DSK_BLOCKREMOVABLE (20h) combo to test for presence of actual media (where a partition object is present) as opposed to just the presence of a storage device that may not in fact have any media currently loaded (thus the problem we are seeing with USB devices) - I think anyways...for now...
Yeah, I completed that function and learned that the DosOpen API won't deal with anything other than either a fully qualified filename, or in the case of a drive it must be a proper drive letter/number.
Soooo...my hope, as slim as it was, that the numbered DEVICE name could in fact be used by DosOpen was incorrect. Given this I lack a way to connect the devices that the INFO_COUNT_PARTITIONABLE_DISKS parameter gives me when calling DosPhysicalDisk to actual volume/partition objects means that I have no way to check whether a USB device currently has media mounted in it and therefore coudl be tested by DISKIO.
Lars did point out in another thread (circa 2021 =>
https://www.os2world.com/forum/index.php?topic=2792.0) that I may need to use DosPhysicalDisk, but the problem with that approach is in the fact that the returned device handle can only be used with DosDevIOCtl CATEGORY=09h functions and none of those functions return information about the status of media on the device itself, and I never did figure out what is that "...special "filename" to use [with] DosOpen..." either.
Hmmm...

I tell ya it almost seems like core of DISKIO logic should be re-written to approach this from partition/volume perspective, which would give us visiblity to FS stuff (and thus media presence). That subsequently could be used to determine whether an actual DEVICE (which the partition/volume belong to) should be tested. Right now DIKSIO's logic is the inverse of that.
Maybe I just need to re-focus on handling the exception that arises when an unmounted-media USB device is being benchmarked so that this exception can be correctly handled...LOL?