ESP and XBOOTLDR on an sdcard works now with sd-boot when formatted FAT so UEFI directly supports access.
I’m exploring expanding my use of the sdcard to include the rootfs. This is for a backup server where the space for internal drives is limited and I require that the OS and data are on seperate physical devices.
Putting the ESP (and XBOOTLDR if desired) on the sdcard should be fine. With fstab set to automount them they would rarely be mounted further reducing sdcard access though allowing for updates to complete normally.
But with the rootfs also on the sdcard I have to be cautious. For instance, vmware found that doing the equivelent with esxi resulted in failures so now they have SD card/USB boot device revised guidance. Interestingly they mention that nvme over usb is just as bad as usb flash.