That's a shame - working on video on an external drive is pretty important for those of us with bigger files and smaller internal drives! It also ensures projects are fully independent and can be moved between machines.
How are you finding Lumafusion apart from that?
You can still work using an external drive. So all the big video files are stored externally, but the project itself is created on to the local drive, so if you want to keep a copy of that together with the video files, you will need to manually export it to it.
The exported project package can be saved with all of the video files (for future editing) or with just the trimmed portions of them (if you only plan to do minor adjustments), so projects can be moved between machines.
Either way, I think it would have been neater if I could have relocated the entire LF directory to my movies SSD, in the same way as I do with iMovie and other editing software.
I love LF on the iPad and I have been using it extensively for some time now.
As I now have an M1 Mac, I am exploring the best way to work with LF on it, including the best way to share projects with the iPad without creating too much duplication.