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As with most of the old installers re-downloaded from the App Store (and apparently in the recovery console too) the InstallESD.dmg is a XAR archive rather than a regular compressed DMG. The DMG is inside the XAR archive and has to be extracted. The commands for the conversion are:

The issue with Sierra as with most of the old installers re-downloaded from the App Store (apparently from the recovery too) is that the downloaded InstallESD.dmg is not in a UDZO format, but a XAR archive or rather a XAR wrapper and within it is the real InstallESD.dmg in UDZO format. the XAR wrapper needs to be removed to access the inner package. You can use pkgutil or XAR command. The XAR tool is a product of the defunct OpenDarwin project. It is a command-line tool, like pkgutil. But while pkgutil works on flat packages and the new receipts database, XAR works exclusively on flat packages.More info about different Apple archives you can find here and here. The commands for the conversion are:

As with most of the old installers re-downloaded from the App Store (and apparently in the recovery console too) the InstallESD.dmg is a XAR archive rather than a regular compressed DMG. The DMG is inside the XAR archive and has to be extracted. I was installing on the USB labeled Untitled so the commands for the conversion are:

From this point one can create a USB installer from the InstallESD.dmg or Install Sierra onto a disk. To install Sierra navigate to:

When reinstalling macOS Sierra from internet recovery we get the following error:

osishelperd[547]: mountDiskImageWithPath: /Volumes/Untitled/macOS Install Data/InstallESD.dmg
osishelperd[547]: Couldn't mount base system dmg! (error code 110)
osishelperd[547]: IATOOL: Failed to mount outer dmg

As with most of the old installers re-downloaded from the App Store (and apparently in the recovery console too) the InstallESD.dmg is a XAR archive rather than a regular compressed DMG. The DMG is inside the XAR archive and has to be extracted. The commands for the conversion are:

From this point one can create a USB installer from the InstallESD.dmg or Install Sierra onto a disk. To install Sierra execute the following providing the drive where the macOS Install Data folder is downloaded to a drive labeled 'Untitled':

I know what happened, but I don't know how to continue from the recovery console after fixing it. Maybe someone knows how to continue the "Apple way". As with most of the old installers re-downloaded from the App Store (and apparently in the recovery console too) the InstallESD.dmg is a XAR archive rather than a regular compressed DMG. The DMG is inside the XAR archive and has to be extracted. I was installing on the USB labeled Untitled so the commands for the conversion are:

cd /Volumes/Untitled/macOS\ Install\ Data/
/usr/bin/hdiutil attach InstallESD.dmg -nobrowse
cd /Volumes/OS\ X\ Install\ ESD/Packages/
installer -pkg OSInstall.mpkg -target /Volumes/Sierra/ -verboseR

I used a USB stick labeled `Untitled` to install `macOS Sierra` from Recovery. Apple creates a folder named `macOS Install Data` in the root of the USB volume with the required files:

pkgutil --expand /Volumes/Untitled/macOS\ Install\ Data/InstallESD.dmg /Volumes/Untitled/Sierra mv /Volumes/Untitled/Sierra/InstallOS.pkg/InstallESD.dmg /Volumes/Untitled/macOS\ Install\ Data/InstallESD.dmg rm -r /Volumes/Untitled/Sierra

After that you can use another USB to create the installer:
- Attach `InstallESD.dmg`:

hdiutil attach /Volumes/Untitled/macOS\ Install\ Data/InstallESD.dmg

- Attach `BaseSystem.dmg`

hdiutil attach /Volumes/OS\ X\ Install\ ESD/BaseSystem.dmg

- Get the disk name of the BaseSystem.dmg:

diskutil list virtual | grep "OS X Base System" 1: Apple_HFS OS X Base System 2.0 GB disk9s1

- Find the USB number with `diskutil list`
- Format the USB:

diskutil partitionDisk disk7 HFS+ USBSTICK 100%

- Get the details of the USBSTICK:

diskutil list /dev/disk7 (external, physical): #: TYPE NAME SIZE IDENTIFIER 0: GUID_partition_scheme *15.7 GB disk7 1: EFI EFI 209.7 MB disk7s1 2: Apple_HFS USBSTICK 15.4 GB disk7s2

- Restore "`OS X Base System`" onto `Apple_HFS USBSTICK`

asr restore --source /dev/disk9s1 --target /dev/rdisk7s2 --erase --noprompt --noverify

- Remove the symlink for `Packages` folder:

rm -r /Volumes/OS\ X\ Base\ System/System/Installation/Packages

- Copy the `Packages` folder to "`OS X Base System`" Volume inside `/System/Installation/` subfolder:

cp -rpv /Volumes/OS\ X\ Install\ ESD/Packages /Volumes/OS\ X\ Base\ System/System/Installation/Packages

- Copy `BaseSystem.chunklist` and `BaseSystem.dmg` to the root of the USB installer:

cp /Volumes/OS\ X\ Install\ ESD/BaseSystem.chunklist "/Volumes/OS X Base System" cp /Volumes/OS\ X\ Install\ ESD/BaseSystem.dmg "/Volumes/OS X Base System"

- Detach the mounted images:

hdiutil detach /Volumes/OS\ X\ Install\ ESD hdiutil detach /Volumes/OS\ X\ Base\ System

As with most of the old installers re-downloaded from the App Store (and apparently in the recovery console too) the InstallESD.dmg is a XAR archive rather than a regular compressed DMG. The DMG is inside the XAR archive and has to be extracted. I was installing on the USB labeled Untitled so the commands for the conversion are:

cd /Volumes/Untitled/macOS\ Install\ Data/
/usr/bin/hdiutil attach InstallESD.dmg -nobrowse
cd /Volumes/OS\ X\ Install\ ESD/Packages/
installer -pkg OSInstall.mpkg -target /Volumes/Sierra/ -verboseR

To create a USB Install disk follow this:

• Attach InstallESD.dmg (if not already attached):

/usr/bin/hdiutil attach /Volumes/Untitled/macOS\ Install\ Data/InstallESD.dmg -nobrowse

• Attach BaseSystem.dmg

/usr/bin/hdiutil attach /Volumes/OS\ X\ Install\ ESD/BaseSystem.dmg -nobrowse

• Get the disk name of the BaseSystem.dmg:

diskutil list virtual | grep "OS X Base System"
  1:                  Apple_HFS OS X Base System        2.0 GB     disk9s1

• Find the USB number with diskutil list
• Format the USB:

diskutil partitionDisk disk7 HFS+ USBSTICK 100%

• Get the details of the USBSTICK:

diskutil list
/dev/disk7 (external, physical):
   #:                       TYPE NAME                    SIZE       IDENTIFIER
   0:      GUID_partition_scheme                        *15.7 GB    disk7
   1:                        EFI EFI                     209.7 MB   disk7s1
   2:                  Apple_HFS USBSTICK                15.4 GB    disk7s2

• Restore "OS X Base System" onto Apple_HFS USBSTICK

asr restore --source /dev/disk9s1 --target /dev/rdisk7s2 --erase --noprompt --noverify

• Remove the symlink for Packages folder:

rm -r /Volumes/OS\ X\ Base\ System/System/Installation/Packages

• Copy the Packages folder to "OS X Base System" Volume inside /System/Installation/ subfolder:

cp -rpv /Volumes/OS\ X\ Install\ ESD/Packages /Volumes/OS\ X\ Base\ System/System/Installation/Packages

• Copy BaseSystem.chunklist and BaseSystem.dmg to the root of the USB installer:

cp /Volumes/OS\ X\ Install\ ESD/BaseSystem.chunklist "/Volumes/OS X Base System"
cp /Volumes/OS\ X\ Install\ ESD/BaseSystem.dmg "/Volumes/OS X Base System"

• Detach the mounted images:

/usr/bin/hdiutil detach /Volumes/OS\ X\ Install\ ESD
/usr/bin/hdiutil detach /Volumes/OS\ X\ Base\ System