Okay, the openHABian menu is something you will find after installing the system on an SD card.
If you do not have any prior experience with openHABian I would recommend to go with an sd card. There is no eminent reason to prefer an USB stick and you can still switch at any point if you really want to.
Regarding the option, after booting the system and connecting via SSH you will be able to execute
sudo openhabian-config to see the menu mentioned in all previous update postings here (scroll up). There you will find the menu entry “Move root to USB”.
As for the installer-config.txt: Your quote tells me that you are on Windows and use the default Notepad. Microsoft Notepad does not support Linux line endings, that’s why everything is cluttered together from your point of view. That’s not your fault, MS doesn’t care that millions of users run into that problem at some point in their life. A very general suggestion: Install the way better Notepad++ and use it from here on out!
After you got a sane view on the content of the file, just add
usbroot=1 at the end.