Most likely a 32-bit truncation error in a device driver somewhere.

It's taking the 1TB byte count, which requires 48-bits to represent in binary, and probably using only the bottom 32-bits (or 31-bits) of it. Which in this case might result in an oddball value like "32MB".

Upgrade the chipset drivers and try booting again.

As for the "slow" copy time.. USB does about 30MBytes/sec max.
So for 1TB, that's 1000*1000 MBbytes, divided by 30, giving a theoretical best time of 555 minutes, or half that for the 500MB original drive. Odds are good that the copy s/w may not overlap reading/writing by 100%, though, so that number could double.

Cheers