Currently, installkernel doesn't seem to be used for initramfs generation.
I think it would make more sense to use installkernel for this process, but this is currently not possible because there is no way to copy config for the initramfs generator into the build environment.
If functionality were added to copy files into the build environment, I think it would be very easy to use installkernel for the initramfs generation portion of the image build process, specifically for livecds.