Linux

I've never built a full ISO or Libre kernel specifically. But, For debugging few issues in my laptop I've built the kernel for qubes OS and app VMs. But from your description it sounds like you just want to disable certain modules. That can easily be achieved by updating the .config for the kernel and if needed you can add the patches to the kernel from Linus (Qubes is already adding few) check out https://github.com/QubesOS/qubes-linux-kernel

you can also use Qubes builder v2 to create rpm packages in secure way.

Absolutely, this is an admirable project.

But the first thing you should know is that QubeOS is not based on Linux, but is actually a different kernel, Xen. The Xen kernel virtualizes Linux, and all Linux runs under it.

Networking and hardware access is done by certain VM's having devices (like the ethernet card or monitor/keyboard) passed through them, where Linux then handles the hardware access with it's drivers.

This is important to understand that, because QubeOS is not a Linux distro. Really, it's just that they selected Linux (it was either Debian or Fedora IIRC) as their management VMs.

But once you understand that it's absolutely feasible to adjust the VM's. It's probably easier to modify a LInux distro (or create your own) and use that for all the VM's, and then to reuse Qube's management related software. That way you could do something like ship a version of debian that disables non-free software and firmware in the debian repos. Doing that is probably easier than creating your own distro entirely from scratch.

Another interesting thing about Qubes is that you are not limited to Linux. Of course, using Linux will be easiest. But the management VM's can technically be any OS that supports it.