Cannot initiate Windows 7 install on MacBook Air bootcamp
I got it sorted, it was probably my fault not understanding the options properly.
The actual install can only be started by that last option that says eider:

remove windows 7 or later version

OR

install windows 7 or later version

So if you already have a Windows partition created you will see remove windows 7 or later version, you need to remove it and then it will change into install windows 7 or later version, after creating the partition again, it will restart and the install will begin.

If you already have the bootable stick previously created by these steps, just plug it without checking first two boxes (create boot stick, download support software), creating that stick would take hours.

I think Apple could make it more clear (the re-install part).