I converted the batch to an exe so you can't get the password
To your dismay, you didn't fix anything on that front. If you sent me the exe I would prove it 
There's no foolproof way to do this with batch though, that's the truth. If you want something to be secure on your USB, why not use a utility like BitLocker?
You don't have to install the program anywhere in your workplace, but it will protect your key anyways with password security. I don't see how they wouldn't allow that.
The batch script itself isn't quite all pretty though unfortunately, but i'll point out a few reasons.
1) There's no reason for this because this is the end of the script anyways.
Anywhere where goto End is called could be easily replaced by exit /b or goto :eof and thus making :End useless.
2) If this file is double clicked the console will close by the time this script has nothing else to run or it terminates, so things like this will not be seen unless you can read it within the fraction of a half of a second that the console stays open after this is echoed to the output buffer:
Code:
echo USBHDD created successfully
3) These are 2 separate commands to be interpretted here
So it should be separated by a '&' or each on a new line.
4)
Should be:
5) Code:
if %cho%==y goto LOCK
if %cho%==Activate goto LOCK
if %cho%==n goto END
if %cho%==N goto END
You don't account for the capital 'Y' here, but that could be avoided by using the /i switch to check case insensitively. Although you have 2 methods here that goto LOCK.
I've cleaned up your batch code for you a bit:
Code:
@ECHO OFF & cls
title Folder USBHDD
if EXIST "Hidden Folder" goto UNLOCK
if NOT EXIST "USBHDD" goto MDLOCKER
:CONFIRM
echo Lock and encrypt USB?
set/p cho=^>
if /i "%cho%"=="y" goto LOCK
if /i "%cho%"=="n" goto :eof
echo Incorrect Choice. Try Again.
goto CONFIRM
:LOCK
ren "USBHDD" "Hidden Folder"
attrib +h +s +i "Hidden Folder"
echo Folder Hidden
pause & goto :eof
:UNLOCK
echo Access is requested. Type the Master Control Code
set/p pass=^>
if NOT "%pass%"=="bypasssecurityprotocol" goto FAIL
attrib -s -h -i "Hidden Folder"
ren "Hidden Folder" "USBHDD"
echo Access Granted
pause & goto :eof
:FAIL
echo Invalid password
pause & goto :eof
:MDLOCKER
md USBHDD
echo USBHDD created successfully
pause
Other than that, have you looked into the flags for ATTRIB: /S, /R, /D?
Open up command prompt and type in "ATTRIB /?"