When Windows NT 4.0 was released in 1996, most installations were performed via boot floppy disks or the CD-ROM’s DOS-based WINNT /B command. WINNT32 was introduced as a convenience for users already running NT 3.51. It allowed an in-place upgrade without rebooting to DOS.
Thus, WINNT32.EXE is not the full installer but an that prepares the system for a network- or CD-based installation.