Hello,
You are seeing that message because WinRE often does not load Wi-Fi drivers. Intel AX201 usually needs the full driver package, which WinRE does not have, so the network step fails even though Wi-Fi works fine inside Windows.
The quickest way to use Cloud download without Ethernet is to start the reset from within Windows so the image is downloaded before the PC reboots into WinRE. Do this while you are online on Wi-Fi:
Open Settings > System > Recovery > Reset this PC. Choose Keep my files if you want to preserve user data. Pick Cloud download. Let Windows finish downloading the recovery image first, then it will reboot and apply it without needing Wi-Fi in WinRE. Keep the laptop on AC power and make sure you have enough free space for the download.
If this still asks for network inside WinRE, tell me and I will give you the next option, which is to add the AX201 driver into WinRE so Wi-Fi works there.