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It works. The trick is you need to install High Sierra on the external drive before you upgrade since you can't run the High Sierra installer from a newer version of the operating system. I did have to jump through a lot of hoops before I figured it out. I actually ended up installing it on a thumb drive that I had. For some reason, the external hard drive was being a bit balky.
This doesn't really help me a lot. Running Sierra off of a USB drive is pretty darn slow. Running on the mac mini works just as well for me. Now that I have the alternative working, I might try upgrading my mac mini to Sierra.
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