Internal memory is divided into several partitions - one of them is recovery and another is dtb. When you use toothpick method, u-boot looks for recovery and dtb image on SD card/USB drive and if it doesn't find them, it loads them from internal memory. When you install >=.006 build to internal memory, factory device tree in internal memory is replaced and it won't work with factory recovery (not true for boxes with the latest kernel, i.e. S905X and maybe some S905).
Why it says "This step is not needed for first install"? When you have original factory firmware on internal memory, you also have original device tree that works with recovery image. So when you install LE to internal memory for the first time, you don't need to provide recovery and device tree images.
Thanks kszaq
I just wrote my version of instructions below after reading your explanation.
I got thrown off with the before and after count of files on the card before flashing.
Greatly appreciated in explaining how this works.
Download zip file from LibreELEC release folder.
Unpack downloaded file to SD card/USB drive - you should now have 5 files on your card
1.aml_autoscript, 2. factory_update_param.aml, 3. a zip file with an update, 4.dtb.img and 5. recovery.img.
Note; You will only have 3 files on your sd card if it is first time flash.
1. aml_autoscript, 2. factory_update_param.aml, 3.a zip file with an update,.
Factory recovery and device tree images are already on internal memory.