Why is there no
DEVICE=C:\Windows\Ifshlp.sys
in config.sys ?
This is one of the possible causes for that error.
https://www.datadoctors.com/help/question/292 … ization-failed/
EDIT: If the issue started after installing/applying "Phil's Computer Lab dos starter pack", it is not unexpected as the web page for that states :
This starter pack has been tested with MS-DOS 6.22 and 7.1. DO NOT install this starter pack in Windows 95 or 98 MS-DOS mode. It is meant for pure MS-DOS only.
I find the statement a bit ambiguous, but I think that means that this should not be used on a system where you expect Windows 95 or 98 to actually be started into Windows' graphical interface.
Source: https://www.philscomputerlab.com/ms-dos-starter-pack.html
EDIT2: Especially if you want to experiment and try new or otherwise untested things, I suggest you consider a backup strategy to easily recover from failed experiments. Backups are also nice to have because Windows 9x can easily end up corrupted just through normal use as it is much less robust than newer OSes.