Legacy apps can support long paths up to 32767 chars if they prefx path with "\\? \" and use Unicode versions of Win32 API calls, which is easy to do. Each component in the path can only be 255 chars, but total length can be 32767 chars.
The specific issue I had at the time was on the final page where you enable "Create ISO" and then choose a path and ISO filename to use, where my total path length exceeded 255/256 chars. NTLite trimmed it to 255/256 chars.
It's possible this also actually unearthed a bug with the buffer not being large enough by maybe 1 character (eg. not account for terminating NUL character), as during processing, NTLite crashed with a Heap error - no crash dump was created.
After re-processing the image with a shorted ISO path name, it went through fine.