Starting mysqld-install-db server setup with --enforce-storage-engine=InnoDB gives:
Interesting is also the 168 unknown error from InnoDB.
Perhaps a better way to handle this would be to automatically make system tables MyISAM (without any overwrite possibility). This would also make sense given that a server which already has MyISAM system tables can be started fine with --enforce-storage-engine=InnoDB thereafter, i.e. the "enforce" naming can be misleading in any case.
Another option is to disable the enforce-storage-engine option (or the InnoDB setting specifically) for mysqld-install-db only.