I cannot restore any system image which was created in Windows 10 v1709 using Backup and Restore.

Two things:

1. Deprecated does not mean removed. 
2. In my case, I was able to create the system image from 1709 but not restore.

The long-winded answers are pointless. Yes, MS recommends using a third party tool so that at some point in the future when the status goes from deprecated to removed users won't be left high and dry, but the tool  they provide to do the job currently  creates backups just fine. It fails to restore. Period. That's broken. Not deprecated.

I agree, it is broken!

It works fine with the old Legacy machines.

It also works on a UEFI machines as long as you don't need to reformat the disk.

If you try a restore to a different disk it needs to recreate the partitions and reformat, that is the phase when it fails.

Using third party programs is not a solution as suggested by some in this thread.

Microsoft needs to fix the bug.

Another problem with third party programs is that you need to create a bootable disk or USB stick for every PC, because they just setup the drivers for the PC where you create the bootable media.

The windows installation media works pretty much on every PC unless you need some new driver that is not yet included.

I surely don't want to keep a separate bootable recovery media for every different PC I have to deal with :(

Microsoft has broken a critical safety safety feature relied upon by millions of non-technical users.  Users who do not have any exposure to or understanding of the official 'notice' and don't know what 'deprecated' means. 

The unconscionable and criminal element is that the backup has not been disabled, just the restore.  Users will not find out about it until their data has been permanently and unrecoverably lost, with unlimited potential for material damages. 

This is exactly like taking your car in for an oil change under warranty to the dealership, during which the seatbelt anchors are secretly replaced with 1# breakaway tabs.  There is some fine print on the website saying the seatbelts have been 'deprecated' and a 3rd party restraint system should be installed.

I am shocked the Microsoft legal department hasn't stepped in and demanded that an emergency patch be issued for Windows backup.  At very least the backup feature should be riddled with pop-up warnings stating that the restore may not work post-1709.  This is the most egregious example of gross negligence I have ever seen in software (30 years in the business).  I know that EULAs are ironclad and could teach the dukes of hell a lesson, but this is so bad I doubt a well-informed jury would give Microsoft a pass.

Seriously, Microsoft:  this is not only wrong and bad for business, this is going to cost you in court.  Warn people or disable the backup feature post 1709 NOW.

I'd like to think so, but probably not since no one could cost justify the action, maybe a class action though.

They recommend it because they know the restoration FAILS!

Restoration of the OS to the point and time the OS was backed up should be a function of the OS. No ifs, ands, buts, or nuts, or excuses to sell 3rd party software. Its accurate to say XP can do something Win10 can not. Very, very, sad commentary. :-(

Two things:

1. Deprecated does not mean removed. 
2. In my case, I was able to create the system image from 1709 but not restore.

The long-winded answers are pointless. Yes, MS recommends using a third party tool so that at some point in the future when the status goes from deprecated to removed users won't be left high and dry, but the tool  they provide to do the job currently  creates backups just fine. It fails to restore. Period. That's broken. Not deprecated.