When folks understand what an SD image is, they don't usually have problems, but if they don't, they can end up confused.
An SD card is just a long sequence of bytes, effectively. When you partition and format an SD, it's sort of like building a bunch of shelves and a card catalog to track files, somewhat like a library. As files are written onto the 'shelves' (arbitrary byte blocks on the drive), the card catalog is kept updated. That's how you can have many files and directories stored in an arbitrary byte sequence; some of the bytes are defined as tracking structures for the rest of them.
A card image is created by literally reading the bytes, in order, from the storage device, and writing them to a file. Everything comes along that way, including partition and file layout information. You're copying the library, not by taking the books off the shelves, but by making a copy of every brick in the building, every shelf, and every book, and reassembling it somewhere else.
Burning an SD image is going the other way; it's taking a file and blasting it into the SD card. It starts at byte 0 and overwrites bytes until the image is exhausted. If those bytes have a partition layout and filesystem(s) on them, voila, you've now got a new live filesystem on the USB key. This totally deletes anything that was on the SD to begin with; even if the shelves aren't overwritten, the card catalog is thoroughly destroyed.
The Mr. Fusion image is much smaller than most SDs, so when it boots up, it will resize the too-small partition layout to encompass the whole disk. It modifies its own partition layout directly, which is not normally done, but is obviously possible. When you first burn the image to a card, it will look like the disk is only 2GB, no matter how big the card is. After you boot it up and let it install, it will expand itself and report the full size of the card.
You were working at the filesystem level, trying to put the image as a named file onto the existing filesystem, when you wanted to be destroying the existing partitions and filesystems by overwriting them with the image.