Ahh, that’s it! You are using an SD card, and it is not formatted with a Linux filesystem type. Without that permissions cannot be preserved. For example, there is no such thing as a Windows filesystem with “group”, “sticky bit”, “suid”, or “guid” bits.
You will have to reformat your SD card where you keep this to ext4. It seems your SD card is currently something like VFAT or NTFS. Windows won’t be able to use that partition, but flash steps should probably work after that without the permissions errors.