This is essentially the process used for installing the base system in Arch. As usual, the Arch Linux wiki page on this topic [1] is a good resource, even if you're using a different system.
If you want to learn more about how a typical Linux system is organized, but don't have the time or patience to go through the Linux From Scratch book [2], installing and configuring Arch once is pretty insightful and also kind of fun.
There are lots of people who have used Linux for years but have never actually gone through this exercise. It's not very fun to have to do it for the first time when an important system fails to boot.
It's great that the modern Linux install process is so easy, but one drawback is that it also makes it easy to gloss over how the system is put together.
I just meant that it can be insightful to put together a toy system from scratch, so that you can learn (at your own pace) how chroots work, learn the conventions around manually recreating your root hierarchy in /mnt, learn what systemd services you actually need because you need to manually turn them on, rather than having a bunch of stuff you don't understand enabled by default, etc.
If you want to learn more about how a typical Linux system is organized, but don't have the time or patience to go through the Linux From Scratch book [2], installing and configuring Arch once is pretty insightful and also kind of fun.
[1] https://wiki.archlinux.org/index.php/Installation_guide
[2] http://www.linuxfromscratch.org/lfs/