Thanks a lot for your explanation, Misalf! I do not fully understand, though, if it does not contradict itself. If I understand correctly then ...
A) the cde boot-code makes the tce-directory be in /tmp.
B) the missing tce= boot-code makes the tce-directory be seeked on hard-disk.
Contradiction? (I am assuming that the tce-directory is in both cases what is linked as '/etc/sysconfig/tcedir'.)
Anyways, the actual behavior of the ISO-build does not seem to match the principle of least surprise. I think that most users would intend to run the ISO-build precisely in cloud mode, similar to a live system without persistency. The whole point in the ISO-build was, IIRC, to get quickly going with dCore without the hassle of boot-loaders.