I was able to get a 4tb drive working and later a 5tb drive working. I ended up returning the 4tb to amazon and got the 5tb for a little more space after learning how it works. So I can confirm the options below work.
Model number: WDBU6Y0040BBK-WESN
Model number: WDBU6Y0050BBK-WESN
Formatted with WD Quick Formatter:
https://support-en.wd.com/app/answers/detail/a_id/16241
The WD Quick Formatting tool only gives two options to format. Windows XP compatibility or Vista and later. I selected Windows XP compatibility and ok. That is basically it. Really simple. The format is NTFS
I can confirm the drive does work with Multiman, Webman Mod, Irisman, and MagnaGunz as a game loader without having to use prep ISO. However, I wasn't able to browse the drive with Multiman file explorer on either drive. I heard this was because the bigger NTFS drives only work with iris-based managers for file exploring. MagnaGunz can browse the drive. It is slow but works, other managers may work too. I haven't tested. I haven't really needed to since it's for ISO games only.
I've been using a mixture of the following:
-fat32 32gb thumb drive (for small pkg games, raps, homebrew, icons, etc)
-1tb exfat drive (for big PKGs mounting with prep ISO and installing through WebmanMod Bluray menu)
-5tb drive exclusively for hosting ISO (mainly with WebmanMod)
The 1tb might not be necessary for the task and would probably work the same with the 5tb, although that's just what I had lying around, So I've been using it that way. It also works good with multiman file explorer.
I suggest using the 5tb drive for PS3 for ISO's. It really only gives you about 4.5tb of usable space. I estimate that would hold maybe 500 - 550 games (depending on the size of the games in the library). However, you may want different options for installing things and managing files like I mentioned above.
I don't know what 5tb drive you are using, but maybe try the WD quick formater? Or you could always get one of the drives I mentioned above.