since it is detached I don't think there will be a problem. Check with your AHJ to make sure.

Since this is a detached building, do you have a building permit?

If so you will have a series of inspections to receive your CO (certification of occupancy).

Therefore, check your local building codes to make sure you are in compliance.

Enjoy the journey.

eal51 in western CT

I know it's not as messy but why would you want to? Just do it right and vacuum up afterwards. It will have that new house smell & It's a lot cheaper too. $7/sheet of sheetrock vs $20/sheet of OSB.

If you are concerned about the osb violating fire code check the building/fire codes for your area.Or about insurance coverage in case of fire better to check and make sure it is within code.
Have you thought about using plain old locally cut pine?
Around here my sons and I built a small animal barn and using local hemlock boards were cheaper than buying osb or other type of plywood.
Using non-sheetrock on the walls I agree is the best.Dont Have to worry about finding studs to attach items to the wall nor aobut making dents/holes in the sheetrock.

Post what you end up doing.