Tested under Windows 10 Pro x64, version 1903
Download WAIK and install Deployment Tools therewith
Download and install Windows PE (no longer available from within WAIK since version 1809)
Launch Deployment and Imaging Tools Environment from Start > Windows Kits with admin rights
copype amd64 C:\WinPE_amd64
dism /Mount-Image /ImageFile:C:\WinPE_amd64\media\sources\boot.wim /index:1 /MountDir:C:\WinPE_amd64\mount
dism /Image:C:\WinPE_amd64\mount /Add-Driver /Driver:c:\drivers /Recurse
md C:\WinPE_amd64\mount\windows\<MyApp> xcopy C:\<MyApp> C:\WinPE_amd64\mount\windows\<MyApp>
Add files and folders - Copy desired files and folders into C:\WinPE_amd64\mount\; they will be located at the root of X:\ when WinPE is booted.
takeown /F C:\WinPE_amd64\mount\Windows\System32\winpe.jpg icacls C:\WinPE_amd64\mount\Windows\System32\winpe.jpg /grant Administrators:F copy new-background.jpg C:\WinPE_amd64\mount\Windows\System32\winpe.jpg
dism /Unmount-Image /MountDir:C:\WinPE_amd64\mount /Commit
MakeWinPEMedia /ISO C:\WinPE_amd64 C:\WinPE_amd64\WinPE_amd64.iso
MakeWinPEMedia /UFD C:\WinPE_amd64 F:
Windows PE does not include a graphical shell or usable Desktop; just the wallpaper background image and cmd.exe. A simple GUI shell / file explorer can be had by running notepad.exe then clicking File → Open.
Microsoft's Optimize and shrink the image instructions resulted in a slightly larger ISO file:
DISM /Cleanup-Image /Image=C:\WinPE_amd64\mount /StartComponentCleanup /ResetBase
If you run into errors or just want to start over:
Besides ISO images and bootable drives, VHD output is also supported.