Install Mac OS on external drive: disk locked
Of course after hours of trying, I found an answer soon after I posted.

I connected the external drive
From the app store, I found Big Sur and clicked &quot;Get&quot;. Because I'd already downloaded the installer, it started after a few moments
I clicked continue and accepted the Ts &amp; Cs
When the &quot;select disk to install&quot; came up, only the internal disk was shown so I clicked the &quot;Show all disks&quot; button
The external disk was also shown, so I selected it
A message said the disk couldn't be used as it wasn't APFS with GUID partition map
I backed out of the installer, ran disk utility, erased the disk and formatted it as APFS with GUID
Ran steps 1 to 4 again, this time the install proceeded
20 minutes later I had a bootable external drive.

The above is far simpler than the MacWorld instructions.