One of the steps to fix the "Can't create recovery medium" is to check for system file corruption.
Just out of curiosity I ran an SFC /SCANNOW and it reported "Windows Resource Protection found corrupted files but was unable to fix some of them. ..." If SFC doesn't run through without an error on a brand new system, when then?

This so ridiculous! The only thing that ever ran on that system was a windows update right after doing the initial setup.
But I doubt that there is really anything foul on the system since I have that exact same report on about 4 other systems as well (some old, some new). SFC ALWAYS finds some "corrupted files" that it is unable to fix and so I know by now that this entire mechanism is just a PoS and a waste of time!

MS - get your act together! You constantly introduce mechanisms into Windows that might be originally well-intended but don't work. Why don't you at least removed those once you know they are useless? And even worse: why is this SFC /SCANNOW part of almost every advice one can find in the knowledge base if that mechanism is since years well known to not help or fix anything?