External boot enables me to carry encryption key on it secretly so that I don't need to enter it manually. With on-machine unencrypted boot, you cannot do like that, because it's pointless. Anyway, another important issue is Evil Maid Attack. To recap, if you leave your device alone for a moment, an adversary may edit your bootpath (BIOS/EFI, or just your boot partition) to insert keylogger. Then, as long as you enter your key once, the game is over. BIOS/EFI hacking is not possible if you have trusted stuff setup properly. Hacking an unencrypted boot partition is just piece of cake.

I believe Linux or BSD can do whatever you want, just be careful with what you want.