Q. Can you SYSPREP Nano Server?
A. No. Nano Server does not include Sysprep. You need to perform customization through a modified unattend.xml answer file (which I walk through automating the update at http://windowsitpro.com/windows-server-2016/customize-nano-server-deployment-during-creation and http://windowsitpro.com/windows/add-elements-xml-using-powershell). Another approach would be to customize deployments using declarative technologies such as PowerShell DSC, Chef or Puppet. Note that if you wish to use DSC with Nano Server you must include the DSC component in your Nano Server image (add -Packages Microsoft-NanoServer-DSC-Package)