Default [Q] USB OTG issue

Hello folks, long time reader first time poster here.

I was looking around on the net and I'm unable to solve a bizzare issue with USB otg. I have a rooted but stock nexus 7 2nd version, and can use USB otg fine I guess, but here's the problem.

No matter what the size of said USB pen, it's always registered as the same size as the tablet storage. I can't understand this at all and nobody seems to have had this problem so far as I can tell. Done various formatting with apps but its always 12gb like the internal SD. Any advice would be very welcome as I'd very much like to use all of my space on a USB stick haha