engine-setup used to ask the user whether or not to create an ISO domain, All-in-one introdued a regression for that by not asking the user that question, but only asking him what the ISO domian's path is, it happens even before the user is being asked whether or not to configure VDSM on that machine.
This is not a regression, it is by design. The assumption in the design phase was that the All-in-one is not installed by default, and is installed only when the user specifically choose to install All-in-one (for POC purposes). This implies that all that is required from a system to work as a single host system, and thiss includes also iso domain. In case the user later want to remove/add an iso domain he can do that the usual way. closing this bug as NOTABUG.