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).
You can check:
https://en.wikipedia.org/wiki/BartPE
https://en.wikipedia.org/wiki/NLite_and_vLite
https://en.wikipedia.org/wiki/WinBuilder
You can also find customized failed build of Windows like Neptune, Chicago, Whistler, Longhorn etc. ISOs.
One example:
https://www.betaarchive.com/forum/viewtopic.php?t=44187
I guess Microsoft thinks that ultimately, it gets people acquainted with Windows and even loving it.