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Just for curiosity; MS-DOS 5.0 works but MS-DOS 3.11 not. Using steps in the initial question above, booting into MS DOS 3.11, running FDISK to...
I have found answer. The partition was not set to Active in FDISK.
Dear all, I have quite simple repro where I am not able to boot into MS-DOS image (it is also described by this question from this year but not...