Hello, thank you for reaching out to Microsoft Q&A.
The error message indicates that your Recovery Environment status is set to disabled.
- Open the Command Prompt (Administrator) Window. Run the command below to confirm it.
reagentc /info
The Windows RE status might be disabled. Run the command below to enable the Recovery environment.
reagentc /enable
If you receive an error, run sfc /scannow in the CMD Window to verify system files.
and run the Dism /Online /Cleanup-Image /RestoreHealth
Once completed, run the reagentc /enable to enable the recovery environment on your device.
Once enabled, try factory resetting your device again.
Let me know if you still need more help.