It seems that the suggested config works perfectly while OS is installed, but not before it. This is how I tested it.
1. 1st I tested it on the installed system, and it worked. Just needed to run update-grub after the file change. On next boot, Menu showed PakOS.
2. However when I chroot into the ISO, using a script, now part of PakOS, called Remaster PakOS, I can edit the grub file, but update-grub throws an error, saying that PakOS does not exist. The standard line in grub file is lsb_release, however running lab_release shows PakOS as OS name in Chroot, but update-grub does not result in Grub entry name to change to PakOS after fresh install.
Now I am thinking of making a one time boot script to run update-grub on 1st boot, so that OS name is changed after 1st boot, however, this will need sudo, which can be a pain to setup in a boot script.
Hope anyone can suggest a cleaner method.