image attachment for hello world using starter content

Wild speculation on my part, I’ve not confirmed this, but perhaps the reason you have trouble with hello-world is because the post already exists in new installations. Perhaps the starter content routine cannot update existing content, maybe starter content must be created anew? If you can add new starter content not titled hello world, I might be correct in this.

You could add featured images to existing posts in the theme activation hook, bypassing the entire starter content routine, but that would be rather hacky and not consistent with the purpose of starter content.

If memory serves me right, I want to say posts is what needs to be worked on next. I remember seeing a comment in the code about making posts work.