Microsoft specifically mentions building the reference image on a VM in many documents, here is one I pulled up in a quick search:
I need to read up more on WDT and see if it would get me to a conclusion faster than I’m getting there the harder way. The amount of time to learn always butts up against the amount of time to do it the hard way that is already procedure. In the end the work is done, but I know there are better ways that would eventually save me time in the future.