It seems that the custom actions that the MSI installer does break when setup.exe is run from a network share. It works ok when the entire build folder is copied to the desktop or somewhere else on the C drive. Adobe is now aware of the problem.
I have heard that msi custom actions run using the system account rather than the logged on user. Thus if you were to add "domain computers" to the list of read access groups on the network share, that might also fix it.