I tried a few more things, the bug with the restore was definitely introduced with 1709. I reinstalled a 1703 on the same UEFI machine and Windows Image Backup and Restore work fine also when I wipe out the existing partition and let the restore program reformat the disk or SSD.
I'm surprised that Microsoft customers are so passive and do not protest louder, this is a screw-up that should be easy for Microsoft to fix.
I also tried to install Windows 10 Insider preview 17025 build 172020-1626 and it fails exactly the same way as 1709.
You are correct, SIB stopped working in the 1709 version or least stopped working correctly.
I have two computers at home so for me to use a 3rd party backup is not a problem. As long as the backup restores the computer without any glitches.
For Businesses it is a different story. They may have more than two computers to backup and restore. There are many Professional Backup programs made specifically for Businesses but they never give a price. You need to call to get a "Quote" which means it probably is going to be expensive.