I seem to recall someone else getting in trouble for distributing Windows ISOs in the past. MS tends to get very touchy on that ostensibly for security reasons (which I actually get). They seem tend to look askance at scripts that strip down the OS but don't seem to otherwise care other than to tell people they won't get support while using said things.
Might be thinking of Ninjutsu OS, which got a DMCA takedown in 2020 for distributing modified Windows installation ISOs "that heavily modify Windows 10 with a huge number of tweaks, mods and extra tools" for pentesting:
Hello, I'm the developer of Winbuilder. Those builder projects exist specifically because they avoid distribuing ANY Microsoft binaries.
You have to provide the installation files or ISO. The files are then extracted from there and used for building a new image.
That is the reason why these hobby and sysadmin projects were able to exist for so long without legal issues from Microsoft. Distributing ISO images with Microsoft files like beta archive and now AtlasOS goes against the EULA conditions (assuming they are valid in your host country).
Disclaimer
By downloading, modifying, or utilizing any of these images, you agree to Microsoft's Terms (<https://www.microsoft.com/en-us/Useterms/Retail/Windows/10/U...>). None of these images are pre-activated, you must use a genuine key.
⇒ it may avoid legal issues, but I wouldn’t guarantee that (are third parties allowed to even distribute the unmodified Windows ISO?