You can't use command-line tools in the recovery environment to manipulate the accounts on the HDD installation of Windows. All you're doing is messing with the recovery environment's own accounts, which only exist on the RAM disk, so any changes disappear the moment you reboot.
Since the recovery environment's account database only requires minimal functionality (there's no need to create new accounts) it isn't surprising that you get an odd error message. (I see the same message, by the way, it doesn't reflect anything wrong with the particular computer you're working on.)
Password change ISOs work differently, by manipulating the registry files on the target HDD directly; they know the format of the registry files and the way in which account information is stored in them.