Since the ADK WinPE.wim does not have a Recovery Environment, we should use a different WIM for MakePE.
Our example build was WinPE 10 x86, so in MakePE\Components we can create a directory called WinPE 10 x86. In this directory copy the Boot.wim from the Sources directory of your Windows 10 Media and place the file in here.
Once this file has been added and we run the Build Script again, we get a different result. MakePE will no longer use the WinPE.wim from the ADK, and instead will use the Boot.wim. It will also create a new Log and ISO in the Builds directory. If you look at the naming structure you will be able to tell which one is from WinPE.wim versus the Boot.wim. You will also notice that the Boot.wim build is larger (because it has the Recovery Components we were looking for).
Booting this new ISO in VM has a different look and works as expected
But I don’t recommend using Boot.wim for MakePE. You should be using WinRE.wim