I have wondered why it is beneficial to have this recovery on a different partition but on the same drive as your Windows Operating System drive. Chances are if you have a disk problem it will take out the whole drive, so it is of no benefit as you will not be able to use it.
I followed the same direction (path) you did, once I was able to get the update to complete. It is easy to move the recovery from your Windows OS partition over to your newly created Recovery Partition (larger sized) using reagentc disable and reagentc enable. It does the recover moving automatically without the use of using setreimage. I could not get the path part of setreimage to work.