That DISM log does not look heathy, seems like image is corrupted or previously edited, something basic failed.
Here is a multi-step approach to a clean slate so we are on the same page:
1. You can now put ISO directly to NTLite Image page, it will treat it as read-only and as a reference tied to the image edit so you can fast Revert.
Then make it expand it by loading the edition you want directly or right-click New Edit, it will prompt where it stores the directories, you can change it.
Going forward when resetting a session all you do is right-click the image edit and choose Revert to get to the ISO state.
2. Go to Menu - Settings - Extracted Update cache - and push Erase to start fresh with the updates as well.
3. After loading the new image and your preset: Go to the Updates pag, make sure Parallel Extraction and Smart cache are turned on in the toolbar.
4. In the Updates page Add - Latest online updates (Updates Downloader) push Verify to get green status on all the previously downloaded updates, to exclude that as well.
Now it should not break, or your host OS DISM is broken somehow, it can happen that it goes haywire.
In that case run the same situation on another OS or a VM and see how it goes.
Awaiting your results.