I think it looks for a hardware floppy drive and for the installer to run from one. At least this was the case with RAM Doubler 1.6 - A mounted disk image won't work. With RAM Doubler 1.6, I was able to write the image file to a floppy and install it OK from there. This may be the case with Maxima, too.

Can you even BUY floppies these days?

Floppies seem still to be sold: http://floppydisk.com/
If you have HDs, with a piece of tape they can be initialized 800/720k, if you have the drive for that.
Many years ago, a friend at BASF told me, the magnetical surfaces of floppies are all the same.
I also drilled holes in 2DD disks those days, if I was in need of a HD.

From Michael Krause's site http://www.icomp.de/home/indexde.htm :
A note on DD and HD 3.5'' disks
The small hole in the upper left corner DOES make a difference. Back when you've been buying lots of disks, it was NOT just some trick of the floppy disk industry to make you buy expensive HD disks when you thought you could get away with cheap DD disks

When you insert an HD disk into an HD floppy drive, the floppy drive actually changes physical parameters, for example magnetization thresholds and writing current strength. A floppy drive does not and can not write an HD disk in HD format with the same physical parameters as a DD disk in DD format!

If you use HD disks with HD format and DD disks with DD format, everything's fine. However, at some time in the nineties, the floppy disk industry stopped selling DD disks. Because many Amiga users still relied on the DD format (only the Amiga 4000 has an HD drive), they simply took HD disks and used them in their DD drives. Some users covered the HD indicator hole with a piece of tape, some didn't. Because their drives were only DD drives, the drive didn't care -- so it really didn't make a difference either! Most HD disks seem to work fine this way, even though they have been constructed for HD formatting. In fact, I've never come across an HD disk that could NOT be used in an Amiga DD drive. There have been people claiming otherwise, though.

However, if you insert an HD disk formatted in DD format into an HD drive, you HAVE to take care to cover the HD indicator hole! If you do not do this, the drive will think it is an HD formatted disk and adjust its physical parameters accordingly, leading to READ and/or WRITE ERRORS on a basically fine disk! Unfortunately, this can not be worked around in software.

So, if somebody gives you a disk with an HD hole and you can not mount it as either Amiga HD or MS-DOS HD, it could be a perfectly fine DD formatted disk -- only your drive is in the wrong mode to read it without errors, because it detects the uncovered HD hole and thinks it is in HD format. Cover the hole with some piece of tape, and everything will be fine.

I'm sure that once the 1.4MB standard was well established, that the disks were exactly the same.

But I do remember that at the time 1.4MB was being established, existing 800KB floppies used much more coating on the surface of the disk, and it was of a coarser quality too. I remember a big fuss in MacUser over the new 1.4MB / 800KB Superdrives, which many suggested were not up to the job of writing and erasing 800KB disks, the electron-volt level provided by the Superdrive was not enough for original 800KB floppies. I may still have the article.

1.4MB disks are VERY different from 720/800K disks. The coercivity of 1.4MB media is double that of 720K media, which may cause issues. Don't use such a reformatted disk to store important data.

720K media is still available.

As for the distinction between 720K and 800K, basically the Mac floppy drive uses a variable speed motor and some other tricks to pack more data on the disk. The Amiga went even further, packing 880K on a DD disk!