Booting (2nd) OS from USB4 40Gbps

I have a computer with an msi tomahawk x870e motherboard and a ryzen 9000 cpu and I’m thinking of booting a linux distro from external storage connected to a USB-C 40Gbps port.

But I can’t really find info on if these ports do pcie tunneling on this board (as I think it’s optional) and I don’t know if a disk on such a port would boot as pcie/nvme or would communicate over some USB standard or suffer some other important performance hits if compared to placing the disk in an NVME slot on the motherboard?

Of course a faster disk can be installed on the board but let’s assume it’s an pcie3 nvme.

Yes that should work. There is some additional latency because of the controllers in between, but probably nothing too noticeable.