I don't think file format has anything to do with this here.
I was able to get the model to work correctly. For what its worth, I changed they name of the variable to 'Output_FGDB'...I don't like using things with spaces or special characters (unlikely culprit). I made this a precondition, validated the model, saved, and then ran it through the catalog window. [I wish I used smaller rasters!].
Here is my model:
And here are the results: