I had this same issue a week or so ago. As @mc-hamster mentioned already, issue is with your partition scheme not being set properly. There is not enough room to install needed files.
I resolved this by using Git Bash terminal (on Windows) to flash firmware using device-install.sh method. When you install Git, Git Bash comes with it. For some reason using ESPHome-flasher GUI does not install the same way.
You can also use Linux machine and install from terminal using device-install.sh method. This is what I did before I was told about Git Bash.
Link to post documenting this same issue:
https://meshtastic.discourse.group/t/solved-help-installing-with-other-than-esphome-flasher/2214
Hope this helps.