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Do not virtualise TrueNAS in a type 2 hypervisor for production. There are no issues with boot on USB-adapted SSD, this is commonly used for HP microservers and other small devices which are short on SATA ports.
As an alternative path to replication to a new pool, you may replace one drive with the 16 TB, remove the replaced drive, extend the 16 TB into a mirror and then remove[1] the remaining 4 TB single drive vdev from the GUI. This keeps the pool, but data is not safe until the procedure is over.
There is, however, a pending issue with vdev removal and block cloning, so you may want to check if there are already cloned blocks in the pool. If there are none, vdev removal should be safe. ↩︎