For me, the first y/N prompt will start sys-whonix. After the first prompt, then shutdown sys-whonix and then yes at the second prompt. If you’ve just shutdown sys-whonix, it should work. Worked for me multiple times.
In stage 3, I did run into an issue where “Shutdown all unnecessary VMs” would also shutdown the sys-usb, which causes the loss of kb/mouse, and the inability to respond to subsequent prompts.
For me, I looked through the grub config and saw no reference to blocking dom0 So I simply removed sys-usb.