Disk Utility uses "FAT" to meant both FAT16 and FAT32. It chooses whichever one is appropriate. (FAT16 for 2 GB or less, FAT32 for over 2 GB.)
That said, some devices have issues with Mac-formatted flash cards. (Some even have issues with standard Windows Explorer-formatted cards, they say to ONLY format on the device, or using an official flash card formatter app.)