Why is the USB drive visible in explorer and also open up explorer when the USB License Key is inserted?

Our USB dongle solution is semi software-based allowing you to make the Key on normal USB flash drives. It's different from the other type with the physical hardware dongle.
You may try to follow the link below. It describes how to disable the scan for removable drives in Windows.
https://www.howtogeek.com/howto/35622/disable-scan-and-fix-for-removable-drives-in-windows/