Yeah, it does the same when you are trying to install the server version from usb stick. It actually wants the cd to be present.

If you have enough space on the card to add the ISO (the whole file, not extracted) without deleting any of the extracted files on the card, I have used this procedure to go around this procedure. I used it for the server ISO but it should work for the alternate too. Just make sure you get the ISO name correctly: