I found the issue.
I checked the log files C:\Windows\System32\Sysprep\Panther\Setupact.log and C:\Windows\System32\Sysprep\Panther\Setuperr.log and found out some of the apps, such as bing translator and Wunderlist, are not provisioned for all users and will not function with a sysprep image. After uninstalling these apps, the reference image capture kicked off with no issues.