I used 7zip to extract the iso image. I just redownloaded the image using the method you described above. So it definitely is valid. Also to be clear I'm making a Win8.1 iso image on a machine that is running Windows8.1. Are you doing all of this on a Windows 10 machine?
Regardless which Windows are a host, file existence checking is the same. We are not even talking about editing the ISO, just adding it to the list and making another ISO image from existing files, if I understood you correctly.
I constantly check basic tool functionality under Win7, 8.1 and 10. This test did under 10, but the test is so basic it must be something else.
Don't like pulling this card, but there are thousands of users, something like this would be heard in a second.
So let's continue with the ideas.
- Are the extracted ISO files on a network share? This includes VM shared folders.
- Is the full path to the image files longer than ~200 characters?
- Can you try mounting the ISO in Explorer and copying files from it, maybe 7-zip is messing up?
Updated to the latest 7-zip v19?
- Using any antivirus tools that scan in the background, sandboxing?